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Environmental cuts limit upward room in iron ore import prices
Apr 27,2018 17:18CST
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Source:SMM
After iron ore port inventories shrank for four consecutive weeks, import prices are likely to inch up after the Labour Day holiday but with limited upward room

SHANGHAI, Apr 27 (SMM) – After iron ore port inventories shrank for four consecutive weeks, import prices are likely to inch up after the Labour Day holiday but with limited upward room, SMM believes. While steady consumption provided support in April, environmental cutbacks in recent weeks grew uncertainties.

Imports prices are estimated at $60-70/mt after the holiday, compared with $66.9/mt on Friday April 27. Spot iron ore prices fell after they rose during this week, in line with prices of futures at the Dalian Commodity Exchange.

Orders at steel plants picked up in April as downstream demand continued to grow, SMM surveyed. Supply is likely to decline as stricter environmental protectionmeasures affect supply, SMM learned. 

Profits at steel mills began to rebound from early April, the SMM data model showed. Net profits of some east China steelmakers stand at 600-700 yuan/mt currently, and those of north China plants stand at 400-500 yuan/mt. Higher profits drove demand for high-grade ore among steel mills.

However, intensified environmental measures also weighed on steel mills' demand for raw materials. As cutbacks in Xuzhou ended last week, a new round of production restrictions has been imposed across Jiangsu province and Tangshan city. A large steel company in east China cut its sintering capacity by 50%. In Tangshan, sintering machines and shaft furnaces are required to halve their production from April 27-30, in response to heavy pollution in the region.

 


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