Tangshan iron ore prices rise on tighter stocks

Looser sintering and production restrictions and tighter portside stocks have lifted portside prices of mainstream medium-grade fines in China's largest steel-producing city of Tangshan.

The Argus-assessed PB fines price yesterday in Caofeidian, a key port in north China's Tangshan, was at a premium of 15 yuan/wet metric tonne (wmt) to prices in Qingdao, a major iron ore delivery port in Shandong province.

PB fines prices at Caofeidian and Qingdao ports converged in October, while during November the premium for Caofeidian widened to Yn5/wmt.

PBF was sold at Yn672/wmt, or a seaborne equivalent of $87.45/dry metric tonne in Tangshan, while deals were done yesterday at Yn657/wmt in Shandong.

Tangshan BRBF prices also widened premiums to Shandong port prices. BRBF in early November sold at Yn655/wmt at Caofeidian port, at a Yn15/wmt discount to Shandong prices. But deals this week have been at Yn660/wmt in Caofeidian and Yn650-658/wmt at Qingdao.

The Argus ICX seaborne fines price is assessed on a cfr Qingdao basis, although portside PB fines prices are assessed at both Qingdao and Caofeidian ports.

Portside iron ore stocks for popular mainstream ores such as PBF, Newman F and BRBF are currently tight in Tangshan, while availability of saleable stocks is higher at Shandong ports.

Steel mills in Tangshan were cautious about booking seaborne and portside fines cargoes in October and most of November as they awaited seasonal restrictions on sintering and steel production. These restrictions, which extend from November to March, have been applied since 2017 to reduce emissions during the winter heating season. But this year Tangshan's city government issued limited restrictions for only December. It exempted mills graded A and B in emissions control compliance from any restrictions and put restrictions equivalent to level 2 pollution control requirements on grade C mills. There is confusion about the extent of restrictions on grade C mills, although these will likely be much looser than restrictions in 2017 and 2018.

Stocks at Tangshan ports are expected to gradually increase in the short term as more vessels are scheduled to discharge iron ore.

PBF portside prices (Yn/wmt)