China: Spot Iron Ore Prices Increase Amid Rising Steel Margins

Iron ore price for Fe 62% fines have been increasing since last week. Benchmark iron ore fines (Fe 62%) index was assessed at USD 65.70/MT CFR, China as on 11th June'18 up by 3% against USD 63.85/MT at the beginning of previous week, rising USD 1.85/MT W-o-W basis.

The beneficial steel margins and declining steel inventories have supported the iron ore prices. Besides, the stricter environmental norms steel mills are purchasing on need to basis iron ore. Despite prefer Brazilian iron ore (Carajas fines), they are still find reasonable for blending ratios.

There is increasing demand from Chinese mills as evident from decreasing port inventories, which fell to 161.03 MnT as against being 161.98 MnT, last week.
However, the demand is expected not to last for a longer time owing to approaching rainy season, resulting in decline in steel demand in China.

Domestic HRC prices in China have increased to RMB 4,280-4,300/MT (ex-works, including VAT), up by RMB 20/MT W-o-W. Similarly domestic rebar prices in eastern China have moved up to RMB 4,050-4,100/MT (ex-works, including VAT) compared to RMB 3,940-3,970/MT (ex-works, including VAT) a week ago.

China's Iron Ore Imports, up 14% M-o-M

China's iron ore and pellet imports have witnessed an increase of 14% M-o-M in May'18. The imports recorded at 94.14 MnT in May'18 compared to 82.92 MnT in Apr'18, according to General Administration of Customs China.