Weekly Review
This week, imported iron ore prices fluctuated rangebound. Fundamentals: According to SMM shipping data, Brazil's shipments increased significantly by nearly 30% this week, driving global iron ore shipments up 1.8% WoW. However, port arrivals decreased by 9.59%. Demand side, daily average pig iron production continued to decline by 3,000 mt this week, with a narrower drop. The supply landscape of iron ore remained unchanged. Macro side, the mid-week fiscal meeting was interpreted positively by the market, boosting market sentiment. As a result, despite weaker fundamentals, iron ore futures prices rebounded temporarily this week. In terms of port prices, PB fines in Shandong fell by 10 yuan/mt WoW.
Chart: SMM 62% Imported Ore MMi Index
Data Source: SMM
This week, domestic ore prices showed mixed performance. Prices in Tangshan, Qian'an, and Qianxi in Hebei increased by 10-15 yuan/mt, while prices in west Liaoning, Chaoyang, Beipiao, and Jianping decreased by 1-5 yuan/mt. Prices in east China dropped by 10-15 yuan/mt.
TangshanThe iron ore concentrates market saw a slight increase. Currently, the Tangshan market is characterized by weak supply and demand, with more beneficiation plants halting production, especially in Qianxi and Zunhua. Additionally, recent shipments from beneficiation plants have eased inventory pressure. Demand side, steel mill profits continue to shrink, with some mills already incurring losses. Raw material purchases are mostly on an as-needed basis, keeping the market in a weak supply and demand state. Local iron ore concentrate prices are expected to fluctuate downward in the near term. Domestic Ore Market in West LiaoningTrading activity remained sluggish, with few inquiries from traders. However, local steel mills and external factors led to partial price reductions. Due to previous accidents, some mines and beneficiation plants remain shut, resulting in tight local iron ore concentrate supply. Demand side, local steel mills showed no significant winter stockpiling demand, and the desire to bargain down prices remained strong. The market continues to exhibit a weak supply and demand pattern, and local iron ore concentrate prices are expected to fluctuate downward in the short term. East ChinaLocal production showed no significant changes, with most operations following a production-to-sales model. In the Linyi area of Shandong, there was no notable progress in resuming production. From a pricing perspective, the average price index of imported ore slightly declined WoW, suggesting potential downward pressure on local iron ore concentrate prices.
Considering both domestic and imported ore prices, imported ore prices fell more significantly than domestic ore prices, leading to a wider price spread between the two.
Outlook for Next Week
For imported ore:Australia's shipments may increase, driving a slight rise in global shipments. Although port arrivals may rebound, the expected increase is relatively small, keeping iron ore supply ample. On the demand side, according to SMM blast furnace maintenance data, steel mills in Hebei may resume production after maintenance, but mills in Shanxi, Shaanxi, and Jiangsu have blast furnace maintenance plans, and pig iron production is expected to continue declining slightly. Additionally, the apparent demand for rebar has dropped significantly recently, and the overall inventory decline has slowed, reflecting a pronounced off-season effect. Considering that pre-holiday stockpiling by steel mills will gradually start after New Year's Day, this will provide some support for iron ore spot prices. Iron ore prices are expected to fluctuate downward next week, but the downside potential is limited.
For domestic ore:Currently, domestic iron ore resources remain tight, providing some price support. Demand side, steel mills show no significant winter stockpiling, and under the current profit conditions, the desire to bargain down prices remains strong. The market continues to see a standoff between sellers and buyers. Domestic iron ore concentrate prices are expected to remain stable with a weak trend next week.
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