SHANGHAI, Jul 10 (SMM) – Spot seaborne iron ore at Chinese ports traded at lower prices on Wednesday July 10, as poor purchasing interest across steelmakers drove several traders to offload cargoes.
Most traders held their offers firm in anticipation of stronger demand, as decent steel margins will prompt mills to step up production.
The most active iron ore contract on the Dalian Commodity Exchange hovered in a tight range to end 0.23% lower at 881 yuan/mt on the day, after two consecutive days of sharp gains.
The expected margin that Chinese steelmakers get for producing rebar with iron ore of $120/mt stood at some 400 yuan/mt as of July 10, SMM calculations showed. Some eastern mills could see a margin of 500 yuan/mt.
The margin on hot-rolled coil came in at 250 yuan/mt.
Improved profits are expected to bolster demand for higher-quality iron ore, as mills that are not under production curbs will expand output. This is expected to continue to support prices of spot iron ore at ports.