Last week, the iron ore prices fell 40-50 yuan/mt in Qian'an and Qianxi county in Hebei province; fell 50-60 yuan/mt in Chaoyang, Beipiao, and Jianping city in western Liaoning province; and lost 10-30 yuan/mt in east China.
Affected by the recent futures market and profits, the steel mills in Tangshan lowered the bid price of concentrates sharply. On the supply side, due to the recent price declines, local beneficiation plants that have suffered losses began to stop production. The operating beneficiation plants will halt production after depleting current inventories if prices fail to rebound. On the demand side, steel mills pushed for lower prices amid output cuts plans. Expectations over weaker concentrates demand weighed on local concentrates prices.
In western Liaoning, steel mills lowered the purchase prices of concentrates due to DCE iron ore prices and poor profits. Local steel mills have no plans to undertake maintenance, ensuring concentrates demand. The recent purchases were moderate. The mills were pushing for lower prices and they dared not raise prices, which may affect the execution of previous orders. Beneficiation plants were pessimistic and lacked profit, and they are ready to stop production at any time.
In terms of large mines in east China, the production and sales were relatively stable, and there was no inventory pressure. The profit of steel mills is still low, undermining their purchasing enthusiasm. Some small mines and traders reported sluggish sales. The average price of imported ore slid last week, and will have room to fall this week.
In general, steel mills may start to cut output for maintenance, weakening demand for concentrates. This, combined with steel mills pushing for lower prices, will lower domestic iron ore prices in the near term.
