The domestic Chinese price of iron ore concentrates was down by about Yuan 10/dry mt ($1.45/dmt) week on week Friday, as consumption by domestic mills fell with production being curtailing on smoggy days, market sources said.
Domestic 66% Fe ore concentrate delivered to mills in Tangshan city, in the northern Hebei province, fell to Yuan 690-710/dmt Friday from Yuan 700-720/dmt on December 30, both inclusive of 17% value-added tax.
The slight drop in domestic iron ore concentrate prices came as little surprise to market participants as seaborne iron ore, coking coal and coke prices have been on a slow slide since mid-December — the billet price in Tangshan has been hovering at over Yuan 2,700/mt for the past week.
"It seems that all markets have been losing steam a bit starting mid-December after hitting a one-year or multi-year high, and the domestic iron ore concentrates price is no exception," a sales official from an iron ore mine in east China said.
Iron ore consumption by mills, particularly northern Chinese provinces, including Hebei, Shandong and Shanxi, decreased too due to the sintering and coking being curtailed because of persistent smog since December 29. "The sky has not cleared on January 5 as the weather forecast predicted, so the local authorities in Tangshan have ordered sintering plants to halt operations today until the air quality improves," a procurement official from a mill in Tangshan said.
Such measures have been becoming more frequent in China since 2012 when smog became a serious environmental issue, and mills in Hebei have been used to such emergency requests from the local authorities.
Chinese mills will not have much appetite for iron ore or coking coal ahead of the Chinese New Year holiday either because of abundant inventories. "Price surges over October to mid December last year prompted steel mills to stock up on a bit of coking coal and iron ore, so they have more or less enough to tide them over the two-week celebration of the Chinese New Year holiday," an official from a mill in Hebei said.
Besides, China's coastal ports are piled high with over 100 million mt of iron ore, which will be able to satisfy whatever needs the Chinese mills may have either for particular grades or large volumes, he added.
China will be having one-week official public holiday on January 27-February 2 to celebrate the Chinese New Year, but business will not be back to normal until around February 13.