China’s domestic iron ore concs price up 5% on week on higher demand

24-December-2018

The domestic concentrates market went up 5% or Yuan 35/dry mt last week on stronger demand as steel producers were using more domestic concentrates due to sintering controls to fight pollution from industrial plants amid narrowing steel margins.

S&P Global Platts assessed the 66% Fe domestic concentrate at Yuan 740/dmt ($88.7/dmt) delivered to steel mills in Hebei province on December 14, up from Yuan 705/dmt a week ago, including 17% value-added tax.

Steel mills were using more domestic iron ore concentrates in the sintering process as steel margins narrowed by around Yuan 1,000 mt in three months, based on Platts data.

“We are using a lot of domestic concentrates to produce pellets from our own pelletization plants, many other mills were doing the same as it is cheaper than importing pellets,” a Hebei-based steel producer said.

Meanwhile, blast furnaces production controls during the winter months were strict in Tangshan which led mills to use more pellets as feedstocks.

“Some small to medium size steel producers were using domestic concentrates to blend with Australian low grade fines, overall cost would be lower compared to medium grade fines,” a Hebei-based steel mill source said.

As the alumina content of domestic concentrates is low, it blends well with Australian high alumina cargoes, the source added.

“Compared to importing concentrates and high grade Carajas fines, domestic concentrates prices are still cheaper,” a procurement source said.

Source: S&P GLOBAL PLATTS