SHANGHAI, Aug 30 (SMM) - Due to Powell's hawkish remarks and output cuts of crude steel in Tangshan, iron ore prices fell yesterday, but then rebounded slightly amid fundamental support. Iron ore prices fell by 1.38% to 714 yuan/mt.
In terms of spot market, traders were more willing to ship while steel mills mainly purchased as needed, hence the market trading atmosphere was fair. The transaction prices of PB fines in Tangshan stood at 745-760 yuan/mt, 15-20 yuan/mt from last week. The transaction prices of PB fines in Tangshan were 645 yuan/mt yesterday, down 5 yuan/mt from last week. The transaction prices of PB fines in Tangshan was 760 yuan/mt and down 15 yuan/mt on the week.
On the macro front, Powell's hawkish remarks led to violent fluctuations in the global financial market. The overall ferrous metals prices fell amid the poor market sentiment.
Meanwhile, the symposium of iron and steel enterprises in Tangshan last Friday emphasized the importance of reducing steel production capacity by 8.264 million mt in 2022. In this scenario, the market sentiment weakened.
However, SMM believes that the supply and demand of iron ore is still positive.
On the demand side, it is expected that steel mills will resume the production this week, and the average daily output of pig iron may increase slightly. Therefore, steel mills still have demand for iron ore.
On the supply side, according to SMM research, the total global iron ore shipments stood at 28.03 million mt last week, down 5.4% on the week. Among them, the shipment from Australia stood at 12.47 million mt, up 7.8% on the week. The shipment from Brazil stood at 1.95 million mt, down 39.6% on the week.
The total amount of iron ore arriving at domestic ports fell 20.2% to 19.24 million mt last week
In general, the supply declined, and provided support for iron ore prices. In addition, steel mills steel have demand for iron ore amid the expectation of resumption of production, hence SMM believes that iron ore prices may increase. However, in the short term, iron ore prices may fluctuate as the market sentiment is affected by the output cuts of crude steel.
