China’s iron ore imports price rebounded in mid March reflecting a global price rise on the iron ore market as well as increased demand for steel in the domestic steel market. Many steel makers still remained cautious about making buying decisions.

The iron ore inventories at 25 major Chinese sea ports stood at 97.79Mt on March 19, down 790kt, or 0.80%, from the previous week, according to the Xinhua-China Iron Ore Price Index (Xinhua-China IOP Index. The price index for iron ore imports of 63.5% Fe grade reached 149 by March 19, up 2 points from the previous week, while that for imports of 58% Fe grade also rose 2 points to 126.

The China Iron Ore Price Index (CIOPI) released on March 20 by the CISA for the March 12-16 period also gained 2.20% from a week earlier to 484.34. During this period, China’s domestic iron ore price averaged RMB1005.74/t ($159.5/t) up 0.86% from the previous week, while average imported iron ore CIF price rose 3.84% on week to US$144.60/t, or RMB1069.20/t (tax included).

According to a market survey by 100ppi.com, a commodity information provider, the price of 62% Fe grade iron ore imported from India at East China’s Rizhao port increased to RMB998/t ($158.3/t) by the end of last week (ending March 18) from the RMB988/t ($156.7/t) at the start of the next week, representing a rise of 1.01%.

Iron ore imports price would continue consolidating within a narrow range in the short term considering the relatively high stock level, as many analysts predict a glut of global iron ore will occur in the future and the downward trend of the iron ore prices will continue into 2015.

Wang Xiaoqi, a senior official of the China Iron and Steel Association (CISA), says that China’s flagging dependence on the imported iron ores in 2010 and 2011 was thanks to the rapid production capacity expansion of domestic ores and an increase in imported ores with mining rights owned by Chinese companies.

In 2011, China increased production of iron ore to 283Mt, up 27.15% y-o-y and the production capacity of overseas iron ores with Chinese mining rights reached 180Mt.

Wang added that iron ore prices will fluctuate downward in 2012 within a narrow range between US$110-130/t. If the domestic steel market continues to shrink, the price of imported iron ores should fall below US$110/t.

Source: China Metals e-mail chinametal@xinhua.org