The spread between 65% Fe Carajas Fines and 61.5% Fe PB Fines at Qingdao port under Mysteel’s tracking narrowed to Yuan 87/wmt ($12.5/wmt) as of March 8 from Yuan 111/wmt a month earlier. Market sources observed that domestic steel mills’ demand for higher-grade iron ore shrank recently and led to high stocks of these ore.
When China’s imported iron ore prices generally increased in the recent few months, the prices of high-grade imported iron ore including Brazilian fines performed weaker than those of medium-grade ore, Mysteel Global noted.
According to Mysteel’s assessment, by March 8 the price of 65% Fe Carajas Fines at Qingdao port moved up to Yuan 1,005/wmt after rising by Yuan 32/wmt on month – smaller than the on-month gain of Yuan 56/wmt of 61.5% Fe PB Fines whose price reached Yuan 918/wmt as of the same day.
Inventories of Carajas Fines stockpiled at many major ports in China including Qingdao port (in East China’s Shandong) have been accumulating to touch a two-year high, according to a Shanghai-based market watcher.
“Mills procured less Carajas Fines because the prices of lower-Fe iron ore products increased substantially, while these lower-Fe products are usually blended together with Carajas Fines to a certain Fe grade for mills’ use,” she explained.
Also, most mills’ appetite for higher-grade ore remained low, as they were still on the brink of breakeven and their steel production was steady, she added.
For example, Mysteel’s tracking showed that mills in Tangshan in North China’s Hebei only made a small profit of Yuan 6/tonne on billet sales on March 8, though recovering by Yuan 5/t from the prior week.
Medium-grade ore especially PB Fines, however, stayed rather popular among traders due to the high liquidity of these products, the source pointed out, saying that this feature can ensure traders’ stocks of iron ore stay at a healthy level.
Written by Lea Li, liye@mysteel.com
Edited by Alyssa Ren, rentingting@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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