UNITED KINGDOM May 12 2016 4:11 PM
LONDON (Scrap Register): Surging demand for steel led to trader inventories dipping to an all-time low and soaring finished prices, which in turn helped open up steel-making margins, reported the Steel Index.
However, the boom in steel prices also prompted many previously shuttered mills to reignite their idled furnaces, again raising the spectre of oversupply further down the road.
There was continued strength in iron ore pricing in April, as the TSI 62% Fe iron ore benchmark price averaged over 7% higher than in March. The index rose above $60/dry metric tonne CFR Tianjin port mark for the first time since last summer, and at one point came within a hair’s breadth of touching $70/dmt.
The most recent data showed China’s imports of iron ore in March rising 17% from the low volumes seen in February, when the week-long Lunar New Year holiday saw a drastic curtailment of Chinese buying, TSI added.
With volatility still high, the trade in iron ore swaps, options and futures had another strong month as market participants sought to lay off price risk in the financial markets. Open interest on Singapore Exchange (SGX) reached an all-time high.