- Moderate post-holiday demand weighs on prices
- Rising port inventories and weak steel margins add pressure
Chinese prices for imported iron ore weakened overall during October 8-10, as trading activity in the market recovered only moderately after the country’s National Day holiday over October 1-7, the findings of Mysteel’s latest survey show.
On October 10- a substitute workday for the holiday -Mysteel SEADEX 62% Australian Fines was assessed at $91.65/dmt CFR Qingdao, lower by 3.3% from September, while Mysteel PORTDEX 62% Australian Fines was determined 2.1% lower from the pre-holiday level at Yuan 656/wmt ($98/wmt) FOT and including the 13% VAT.
Although steelmakers mainly consumed their own iron ore stocks for production during the seven-day break, their post-holiday restocking demand for the feed was not very strong, with most mills only buying volume sufficient to meet their immediate production needs, market sources observed.
During October 8-10, the total volume of imported iron ore traded at China’s major ports averaged some 609,333 tonnes/day, lower by 32.2% compared the average trading quantity recorded in the first week after last year’s National Day holiday, according to Mysteel’s tracking.
The persistently negative margins on their steel sales had dented the buying interest of steelmakers in feed materials, Mysteel Global noted. As of October 8, only around 7% of the 247 blast furnace steel mills under Mysteel’s tracking could make some profits when selling their steel products, Mysteel data show.
On the other hand, robust iron ore shipments from Brazil and Australia, plus the steadily mounting iron ore inventories at Chinese ports, also weighed on imported iron ore prices, Mysteel Global noted.
By October 8, the total stocks of imported iron ore piled at the 47 Chinese ports under Mysteel’s survey had increased for a fourth straight week to reach 173.2 million tonnes, edging up 0.6% from September 30.
Under such circumstances, imported iron ore prices in China are expected to weaken further in the coming week, Mysteel’s survey suggests.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint
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