SHANGHAI, Feb 28 (SMM) - uFerrous products prices showed violent fluctuations last week amid frequent government regulations on the raw material side, and the most-traded thermal coal futures contract touched limited down. The relating departments once again held a special meeting concerning raw materials of iron and steel at the beginning of last week, and the policy-based regulation was still relatively strong. In the second half of the week, Russia and Ukraine went to war in an all-round way, causing market panic. The steel mills presented strong restocking demand after the end of the Winter Olympics, and the coke prices also completed the first round of price hike last week. In terms of finished product transactions, most mainstream markets were affected by the slow recovery of demand, the resurging COVID-19 pandemic, and poor weather like rain and snow. The terminal demand performance diverged, damaging the real transactions to some extent.
u. Iron ore market was weak as a whole last week, and iron ore prices are likely to drop slightly further this week owing to shrinking demand. In the past week, iron ore demand recovered to some point as most blast furnaces in Tangshan resumed the production after the Beijing Winter Olympics ended.
On the other hand, however, market transactions were not very satisfactory last week as the speculation activities were constrained by frequent government regulations and the port inventory was also at a high level. In terms of spot prices at ports last week, the spot prices of PB fines in Shandong were flat on the week. With the opening of the Paralympic Games and the Two Sessions this week, the production in north China may continue to be suppressed by the environmental protection-oriented production restrictions, and the demand for iron ore will remain weak, sustaining iron ore prices at the current level with possible declines.
On the supply side, the port inventory across 35 ports dropped moderately in the past week. On the one hand, the arrivals of imported ores at ports dropped slightly recently. And after the Winter Olympics, some steel mills in the north have certain restocking demand, hence the port inventory of imported ores have dropped palpably. In addition, the recent requirements of the country's high-level departments for imported ore traders to reduce their inventories to prohibit hoarding of goods have led to a decline in port inventories. Taking into account the easing of production restrictions this week, the steel mills’ demand is expected to increase.
On the demand side, with the opening of the Winter Paralympics this week, the production of steel mills in the northern region may once again be suppressed by environmental protection control.
