SHANGHAI, Aug 19 (SMM) – SMM expects uncertain outlook for steel prices to keep prices of seaborne iron ore at lows this week, given stable fundamentals in the short term. Iron ore prices may have a chance of rebound, though, if steel prices extend increases. 

Last week, spot and futures prices of steel rallied on production cuts across steel mills who struggled in losses across Shaanxi, Shanxi, Gansu, Sichuan, and Shandong provinces. While this dampened the demand outlook for iron ore, expectations of higher steel prices encouraged feedstock stockpiling at some steelmakers amid low in-plant stocks. This improved iron ore trades in both spot and futures markets in the middle of last week. 

SMM learned that previous falling prices of steel and bad weather kept raw materials stocks across most steelmakers at lows, with inventories across Tangshan mills could meet production for only a week. 

Active purchases by steel mills capped decline in iron ore spot prices at Chinese ports. Purchases by trades, however, weakened on concerns about steel prices. 

As of Friday August 16, traded prices of spot PB fine at Qingdao port slid 20 yuan/mt from a week ago and stood at 725-735 yuan/mt, with SMM’s price index MMi for spot iron ore with 62% Fe losing 35 yuan/mt on the week to 737 yuan/mt. 

The price index translated to $97/mt on a cfr basis, down $5.04/mt on the week.