Market Fears Iron Ore Demand Shock amid Rumours That Tangshn Will Begin to Cap Crude Steel Production from June

Published: May 23, 2023 17:46

Source: SMM

Save

SHANGHAI, May 23 (SMM) – The most-traded DCE 2309 iron ore contract moved in a wide range today, closing down 2.95% at 707 yuan/mt.

SHANGHAI, May 23 (SMM) – The most-traded DCE 2309 iron ore contract moved in a wide range today, closing down 2.95% at 707 yuan/mt. Traders were less willing to sell, while steel mills mostly restocked as needed. Overall transactions were modest. The transaction prices of PB fines in Shandong fell 5-10 yuan/mt to 770-775 yuan/mt; PB fines in Tangshan lost 5-15 yuan/mt to 800 yuan/mt; super special fines in Tangshan dipped 5 yuan/mt to 655 yuan/mt. Eearlier, Tangshan has set goal to cap annual crude steel production, which is not allowed to be higher than the previous year. Recently, there are rumours thatTangshan will implement this poliy starting from June, triggering market concerns about future iron ore demand. This, coupled with the recent increase in iron ore supply, sent iron ore futures prices down sharply. However, traders expect steel mills to restock due to low inventory, thus spot iron ore prices were supported. In view of off-season in end-user market and poor profits of steel mills, imported iron ore prices may still face downward pressure.

Market review

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or for more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

11 mins ago

MMi Daily Iron Ore Report (June 11)

On the DCE, iron ore futures trended weaker today, with the most-traded contract I2609 closing at 764 yuan/mt, down 0.46% from the previous trading day. Port spot prices fell 3–5 yuan from the previous day.

11 mins ago

24 mins ago

[SMM Hot Rolled Coil Daily Transactions] Spot HRC trading narrows slightly

[SMM Hot Rolled Coil Daily Transactions] On June 11, the total daily trading volume of hot-rolled coils among sample enterprises in SMM's four cities (Shanghai, Lecong, Tianjin, Ningbo) totaled 13,220 mt, down 1,030 mt day-on-day, or -7.9%, Gregorian YoY +0.92%, and lunar YoY -6.31%.

24 mins ago

30 mins ago

[SMM Sheets & Plates Daily Review] Sheets & plates to remain rangebound in the short term, downside limited

The most-traded HRC contract fluctuated downward today, closing at 3,358, down 0.33% MoM. Spot sheets & plates fell 10-20 yuan/mt MoM, while some markets held steady. Supply side, hot rolling maintenance impact eased this week, weekly production rose 10,500 mt MoM, and supply pressure remains on a short-term uptrend. Demand side, the late-session decline weighed on market sentiment, with end-users buying at low prices and speculative demand weakening. Cost side, the spot market for coking coal and coke remained in a tight supply-demand balance. The sixth round of coke price increases was implemented, and futures prices are currently in the process of repairing losses. There are market talks of a seventh round of increases on the 12th, and cost support remains in place. In summary, based on HRC social inventory data, east China and south China markets saw MoM inventory buildup, while northeast, north China, and central China markets saw MoM destocking. No obvious supply-demand imbalance has emerged yet. However, as the off-season deepens, imbalances will continue to build. The market is expected to remain rangebound in the short term. Keep monitoring disturbances from the raw material side.

30 mins ago