Abstract

China iron ore prices rose by and large in December, due largely to the production resumption in mills and decreased imports.

The arrivals of iron ore to China’s ports may keep rangebound in January 2022, while the port congestion remaining at a relatively high level in several areas of Northeast China and North China.

China’s crude steel production may slightly rise amid no clear steel production curb policy released so far, which may bring the overall demand for iron ore to increase and the portside stockpile to edge down.

Therefore, SteelHome considers that China’s iron ore prices would keep rangebound with hikes, and the outlook of benchmark 62% iron ore price at $ 105-135 per tonne in January.

Trading Tips: traders are suggested to increase iron ore shipments when the price above 125 usd per tonne. Mills are suggested to maintain their in-plant stockpiles at a normal consumption level, and those with low stockpiles to buy futures contracts and seaborne ores.

1. Review on China Iron Ore Market

China iron ore prices rose by and large in December, due largely to the production resumption in mills and decreased imports.

Benchmark 62% imported iron ore price increased by $ 21.9 to $ 125.91 a tonne on December 24 from the one in late September, based on SteelHome consultancy data SteelHome China Iron Ore Price Index (SHCNOI). The price of domestic-produced iron ore with 65%-Fe content rose by 8.6% to 994 yuan/t.

Platts 62%-Fe Iron Ore Price Index was 125.05 dollars/t on December 24, up 24.95 dollars from the one in late November. Platts 65%-Fe Iron Ore Price Index rose by 29.65 dollars/t to 145.75 dollars/t.

On December 24, seaborne price for 61.5%-Fe PB fines was 125.5-126.5 dollars/t, up 22 dollars/t from the one on November 30. Spot price for 61.5%-Fe PB fines came to 800-840 yuan/t, up 135-145 yuan/t. In Tangshan, 66%-Fe domestic-produced iron ore concentrate fines increased by 130 yuan/t to 940 yuan/t.

T1: China Domestic-produced Iron Ore Concentrate Fines Price

T2: Imported Iron Ore Price at Main China Ports

Source: SteelHome Database

*Need More Data? Just Click SteelHome Database (Microsoft's Windows Version)

2. Iron Ore Supply-demand

T3: China Iron Ore Supply-demand

Source: SteelHome Database

3. Iron Ore Inventory

3.1 Portside Inventory

According to SteelHome survey, iron ore inventory at 46 main Chinese ports was 155.8 million tonnes as of December 23, 2021, up 4.9 million tonnes from the one in late November 2021.

Daily iron ore shipment averaged at 2.625 million tonnes in December 2021, down 70,000 tonnes from a month before. Daily iron ore arrivals at five largest Northern ports (Qingdao, Rizhao, Tianjin, Caofeidian and Jingtang) reduced by 264,000 tonnes m/o/m to 3.181 million tonnes in December 2021.

3.2 Global Iron Ore Shipments & Arrivals to China

Brazil: November’s export of iron ore was 28.992 million tonnes, down 6.05% m/o/m and down 0.54% y/o/y. According to Ministry of Foreign Trade of Brazil (Secex), by December 19, December’s iron ore export from the country was 15.62 million tonnes. Then the December volume is estimated to be around 25.49 million tonnes.

Australia: November’s export of iron ore was 73.93 million tonnes, down 1.2% m/o/m, while up 2.8% y/o/y. By December 19, the December’s iron ore export from Australia was 49.2 million tonnes. Then the monthly volume will be around 80.27 million tonnes.

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5. Outlook on Iron Ore Market

5.1 Supply

The arrivals of iron ore to China’s ports may keep rangebound in December, while the port congestion remaining at a relatively high level in several areas of Northeast China and North China.

Meanwhile, the supply of China domestic-produced iron ore concentrate fines would continue reducing amid cold winters days in North China and year-end maintenance activities.   

5.2 Demand

China’s crude steel production may slightly rise amid no clear steel production curb policy released so far, which may bring the overall demand for iron ore to increase.

5.3 Inventory

The portside iron ore stockpile may fall back from the lofty heights.

5.4 Price Forecasting

China’s iron ore prices would keep rangebound with hikes in January 2021, with the outlook of benchmark 62% iron ore price at $ 105-135 per tonne.

6. Trading Tips

Traders are suggested to increase iron ore shipments when the price above 125 usd per tonne. Mills are suggested to maintain their in-plant stockpiles at a normal consumption level, and those with low stockpiles to buy futures contracts and seaborne ores.