SHANGHAI, Apr 23 (SMM) – Current iron ore prices are unlikely to be sustained due to adequate supply and pressure from high inventory, SMM believes.
Iron ore futures on the Dalian Commodity Exchanged traded rangebound at high levels on Monday April 23, with the main contract closing 2.1% higher at 477 yuan/mt.
In the spot market, offers went up 10-15 yuan/mt higher in the morning as traders purchased actively amid an optimistic sentiment. Steel plants mostly purchased as needed. PB fines were offered at 465-475 yuan/mt in Shandong and at 475-485 yuan/mt in Tangshan.
A total of 73 vessels with 10.15 million mt of iron ore are expected to arrive at major Chinese ports during April 20 to 26, SMM learned. This will be down 7.4% from 10.96 million mt a week ago. However, port inventory level was still over 20 million mt higher than the same period last year. Overall deliveries from Brazil and Australia are set to increase in the second quarter.
On the demand front, blast furnace operating rates in April are only likely to see a slight increase of 1.8 percentage points from the level in March, according to SMM survey. This would result in limited increase for iron ore demand as inventories at steel mills stayed at high levels.
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