Prices of imported iron ore lumps in China have been persisting high on the solid demand from the remaining firm demand from the Chinese steelmakers towards the end of 2020, market sources shared on Thursday.
“Steel mills in North and East China have been procuring iron ore lumps steadily recently, as their sintering operations may be limited now and then in winter whenever the local air quality is poor, so it is rather necessary for them to maintain some lumps stocks to standby,” a Rizhao-based iron ore trader in East China’s Shandong remarked, disclosing that he is holding onto some lower-grade FMG lumps.
As of December 30, Mysteel’s 62.5% Fe iron ore lump premium against 62% Fe Australian fines has hit a new high since mid-May, reaching US cents 19.2/dmtu, or up US cent 6.7/dmtu on week, while the SEADEX 62% Fe Australian Fines price was $158.95/dmt CFR Qingdao on the same day.
As for port inventories, the price of the 62.5% PB lump at Qingdao, East China’s Shandong province, was assessed at Yuan 1,240/wmt FOT and including the VAT, up Yuan 19/wmt on week, while the price of the 61.5% PB fines at the same port went down Yuan 28/wmt on week to Yuan 1,077/dmt FOT and including 13% VAT, according to Mysteel’s assessment.
Over the past two weeks, air quality in some areas in North and East China has worsened, which has prompted the local authorities to curtail sintering operations in their local steel mills, according to market sources.
“Moreover, the lumps stocks, especially those higher-grade supplies has been mainly held by some large-scale iron ore traders, which has made it easier for prices to persist high especially when demand is firm, as higher-grade lumps remain the steel mills’ favourites,” the Rizhao trader added.
A Qingdao-based iron ore trader, also in Shandong, agreed on the sound demand for iron ore lumps from the Chinese steel mills at present.
“Lumps prices have been performing more strongly than fines, but lumps are still more affordable than imported iron ore pellets, so it is still preferred by some Chinese steel mills,” he explained, debuting any substantial impact on lumps consumption because of the rising domestic coke prices.
Mysteel’s latest survey also confirmed a rise in lumps feeds into the blast furnaces of the 247 steel mills across China, as the ratio reversed up to 12.37% by December 30, or up 0.24 percentage point in a fortnight.
Mysteel’s other survey showed that total inventories of iron ore lump at the 45 Chinese ports reversed down by 1.5% on week to 23.1 million tonnes by December 24, or a low since late June, albeit the total iron ore stocks had remained largely stable.
Written by Victoria Zou, zyongjia@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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