Brazil's Vale has resumed operations at its distribution centre in Malaysia, the Teluk Rubiah Maritime Terminal (TRMT), but the fast spreading of the coronavirus in Brazil may keep its iron ore shipments from rebounding significantly in the near term. 

SMM data showed that iron ore stocks across 35 Chinese ports decreased 1.18 million mt in the week ended May 15 to 101.79 million mt, some 21.89 million mt lower than a year ago. This week’s decline almost halved from the previous week’s 2.29 million mt.

Crude steel output across major mills in China averaged 2.05 million mt per day in the first 10 days of May.

The most-active September iron ore contract on the Dalian Commodity Exchange (DCE) climbed as much as 3% on Friday May 8 to hit the highest level over more than the past month, ending higher for the fifth consecutive day at 633 yuan/mt, up 2.59%. 

While production expands, inventory pressure at steel plants continued to reduce on the back of growing consumption, and this may provide upward momentum in near-term steel prices. 

Inventories of hot-rolled coils of steel sheets used to produce home appliances and cars in China fell for an eighth straight week this week, as demand remained robust. SMM data showed that HRC stocks across social warehouses and steelmakers decreased 2.31% in the week ended May 7 to 4.45 million mt. That was smaller than a 4.6% fall in the previous week due to the Labour Day holiday and improved arrivals.

Prices of construction steel rebar will likely stay rangebound in the weeks ahead, underpinned by strong demand from stepped-up operations at construction sites while supply pressure continues to mount. 

SMM data showed that HRC stocks across social warehouses and steelmakers decreased 4.56% in the week ended April 16 to 5.02 million mt, marking a fifth straight week of decline and larger than a 3.59% fall in the previous week.

Inventories of seaborne iron ore at Chinese ports fell slower this week, as steel mills were cautious about raw material procurement amid market turmoil.   SMM data showed that iron ore stocks across 35 Chinese ports fell 910,000 mt in the week ended April 3 to 106.86 million mt, smaller than a 1.57 million mt decline in the previous week. The stocks were 30.44 million mt lower than a year ago.

The US will continue to levy countervailing duties on carbon and certain alloy steel wire rod from China, according to the final determination on the first five-year sunset review on the CVD order by the Department of Commerce released on March 30.