China’s imported iron ore pellet prices both for seaborne cargoes and port inventories surged to multi-month highs, as many market participants are optimistic about the demand for pellet from the Chinese steel mills in the foreseeable future, they shared on Jan 10.
As of Jan 10, the price of the 65% grade Ukrainian pellet hit its five-month high of Yuan 1,038/wmt including VAT ($149.8/wmt) FOT Rizhao port, Shandong of East China, up 15.6% on week, and Mysteel’s 65% grade pellet premium against the 62% fines pricing index surged to its four-month high of US cents 27.8/dmtu as of Jan 9, up 9% on week.
“Pellet inventories at the Chinese ports are held by a few large trading enterprises, which has enabled them to hold onto their offerings prices when Chinese steelmakers restock such supplies for the consumption during the Chinese New Year (CNY) holiday on Jan 24-30,” a Shandong-based trader said.
Mysteel’s latest survey showed pellet inventories at China’s 45 major ports eased further to its almost five-month low of 4.58 million tonnes after having lost another 230,200 tonnes on week as of Jan 9 in contrast to 123.4 MnT of iron ore inventories at the surveyed ports.
Recently, many traders have been actively booking pellet from the seaborne market too on the anticipation of the probably high demand from the Chinese steel mills in the near term, noting the low port stocks and relatively high pellet feed ratio into the blast furnaces, according to a Shanghai-based market watcher.
Over Dec 26-Jan 8 2020, the ratio of pellet feeds in blast furnaces among 64 surveyed steelmakers across China remained high at almost 16% among all the imported iron ore feeds despite of a decline of 0.68 percentage point over a fortnight from its record high of 16.67%, Mysteel’s latest bi-weekly survey showed.
Some iron ore traders, though, have been cautious at stocking up pellets mainly as the liquidity of both pellet and lump are in no comparison with the mainstream fines such as PB fines, a Tangshan-based trader disclosed.
Besides, Chinese steel mills may take a break in the near term after the concentrated procurements for pellets from ports for the long break during the CNY , as well as that “the pellet portside prices are getting expensive for them”, a market insider in Tangshan, North China’s Hebei province said. “In comparison, lump prices have been relatively stable, so mills have concluded several deals of lumps recently for urgent needs,” he added.
As of Jan 10, the price of the 62.5% grade PB lump touched its five-month high of Yuan 866/wmt FOT Rizhao, up merely 1.3% on week compared with the double-digits gains in pellet prices during the period, Mysteel’s data showed.
China’s official CNY holiday is usually one week, but the slow-down in logistics and trading may last for three-four weeks in total because of people’s earlier leaving and later returns from the holiday to celebrate the most important festival in the Chinese tradition.
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
Leave a Reply