Imported iron ore prices to be volatile after swinging on a subdued trajectory

Imported iron ore market swung on a subdued trajectory last week, mainly because steel mills saw weak demand, profit slip and environmental protection-related production limit. A delayed restart and maintenance of more BFs lowered the operating rate of BFs last week, leading pig iron output to shrink again. In spite of a large drop in overseas shipments, iron ore inventory piled up aggressively amid higher port unloading efficiency in better weather. Therefore, there was a significant increase in iron ore supply. In the absence of macro stimulus, iron ore price stayed depressed. In terms of spot prices at ports, the spot prices of PB fines in Shandong dropped by 21 yuan/mt WoW.
Looking at this week, moderate overseas shipments will be monitored. Port congestion will be eased in better weather. Therefore, iron ore port arrivals may increase significantly. Iron ore stocks at ports will keep building up, adding supply pressure. On the demand side, scheduled restart of some BFs from maintenance and a speedup of pre-holiday stockpiling will boost the overall iron ore demand, giving certain support to iron ore price. But the stockpiling may be weaker than expected amid steel mills' poor profit. Iron ore price may be volatile this week.