Sep. Output Recovers Again

China Iron and Steel Association's member producers made 14.17 million tons of crude steel in the last ten days of September, and steelmakers throughout the country produced roughly 16.78 million tons. Their daily output was 1.42 million tons and 1.68 million tons respectively, up 112,000 tons and 131,000 tons from the previous ten days.

There are signs that the authorities of some provinces have slackened their efforts to pursue the energy-saving philosophy, giving mills a chance to gear up their output again. For example, more than 95 percent of steel mills in the Tangshan area have resumed production since early October.

As a result, homegrown iron concentrates prices in Hebei topped 1,200 yuan per dry ton during the first weak in the wake of the National Day holidays, an increase of 5.3 percent from a month before.

The spot prices of iron ore in the international market also rebounded. Indian-origin 63.5 percent Fe content fines were quoted 5.4 percent higher to over 1,200 yuan per wet ton, reaching a four-month high.

The Q4 contract price of Australian ore is $127 per ton, and its delivered price including freight rates would be over $140 per ton. There is still no obvious advantage over spot prices at the moment. As the spot market is on the rise, however, the long-term price could regain its advantage.