Imported Iron Ore Prices Moved Wildly In May Amid Changing Market Expectations

SHANGHAI, Jun 7 (SMM) –In early May, rumours about crude steel production restrictions and poor steel sales soured market sentiment. Subsequently, data released by the National Bureau of Statistics showed that the overall real estate market was in a period of adjustment and was expected to gradually stabilise in the next stage, somehow restoring confidence in the iron ore market. However, market expectations for interest rate cuts fell through after the People's Bank of China announced the one-year and five-year loan interest rates. Rumours about crude steel production caps resurfaced, which aroused market concerns about future iron ore demand, sending iron ore prices lower. From a fundamentals point of view, global iron ore shipments increased in May after overseas seasonal disturbances subsided, with shipments from Australia and Brazil gradually stabilising. Arrivals at major Chinese ports increased by 1.36 million mt month-on-month. Steel mills restarted blast furnaces after profits improved, keeping pig iron production at a high level. Imported iron ore prices fluctuated in a wide range mainly due to changes in market expectations. Iron ore futures prices rose at first and then fell. The spot prices of mainstream iron ore fines at major ports in Shandong and Hebei fell 37 yuan/mt in mid-May. Imported iron ore prices slipped to 745 yuan/mt in mid-May, but bounced back to 784 yuan/mt at the end of the month after market sentiment improved.

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