Premiums Of Imported Iron Ore Lumps Will Face Downside Risks While Pellet Premiums May Hold Stable

SHANGHAI, Jul 4 (SMM) – The premiums of pellets dropped slightly last week, while those of lumps barely changed. Since the beginning of June, sinter production in Tangshan has been restricted, which escalated last week in order to fight air pollution. With sinter in short supply, the demand for lumps and pellets has increased to a certain extent, allowing the port inventory of lumps and pellets to maintain a decline. However, steel mills favoured domestic pellets over imported ones, causing premiums of imported pellets to drop slightly.

This week, sinter supply is expected to increase as environmental protection-driven production restrictions are coming to an end. Rainy weather in many regions will lead to increased moisture and viscosity of lumps, which may dampen the purchase willingness of steel mills. As such, lump premiums will face downside risks while pellet premiums may hold stable.