Pellet Premiums Rise Slightly in Feb, while Lump Premiums Fall

SHANGHAI, Mar 7 (SMM)－In early February, the pellet premiums remained stable and began to rise after mid-February, while the lump premiums fell further. A few mines were closed during the Chinese New Year holiday, hence the output dropped slightly, which pushed up the iron ore concentrate prices. In such a context, the profit margins of independent pellet plants dropped greatly, and some plants were forced to suspend production. Chinese pellet supply shrank, pushing up the import volume of pellets. However, the supply of imported pellets was also relatively limited, which drove up the pellet premiums.
In the off-season for terminal demand, steel mills' finished product inventory continued to accumulate, and blast furnace capacity utilisation rates recovered slowly. Moreover, the prices of lump were relatively high, which was unaffordable for steel mills that get low profit margins. As a result, the lump premiums continued to fall on shrinking demand.