SHANGHAI, Jul 4 (SMM) –The price spread between high and medium-grade imported iron ore continued to expand last week, so did the price spread between medium and low-grade ore. Taking Qingdao port as an example, the price difference between mainstream high-grade ore (IOCJ fines) and medium-grade ore (PB fines) rose 3 yuan/mt to 100 yuan/mt, while that between PB fines and low-grade ore (super special fines or SSF) expanded 2 yuan/mt to 142 yuan/mt. Recently, the blast furnaces of steel mills have resumed production, and the profits of steel mills are relatively high, boosting demand for medium and high-grade ore. In addition, recent mining accidents in Shanxi have made it difficult for local mines to resume production, driving some steel mills in Shanxi to buy more IOCJ fines.
The terminal demand is in the off-season, which may keep steel prices in check. Recent rise in iron ore prices has squeezed the profits of steel mills. After the price difference between medium and low-grade ore has expanded, demand for the latter may improve. It is expected that the price spread between high and medium-grade ore will narrow this week, so will the price spread between medium and low-grade ore.
