SHANGHAI, Jul 28 (SMM) - Data showed that the iron ore arrivals at port last week (7.18-7.24) were expected to be 1,198 mt, down 650,000 mt from the previous week and down 2.98 million from same period last year, according to SMM. Imported iron ore arrivals have fallen for three consecutive weeks, offering some support to iron ore prices.
On the demand side, the downstream finished product market demonstrated weak supply and demand amid summer off season. At the same time, the crude steel reduction policy has been fully confirmed and entered the stage of actual implementation. Steel mills strictly follow the production restrictions, leading to the decrease in operating rate and shrank production. Therefore, the reduction policy has had a huge impact on iron ore demand.
The positive news is that, recently, the Hebei Provincial Department of Ecology and Environment has adopted the "one plant one policy" scheme for differentiated emission reduction measures. The market interpreted it as relaxation on production restrictions, benefiting the raw material supply side.
In addition, steel mill profits are gradually rising, and steel price performance stabilises at a comparatively high level, as production reduced as a result of relative policies on crude steel. As of July 27, electric furnace rebar’s profit stood at 430 yuan/mt, BOF rebar mill’s profit stood at 537 yuan/mt, BOF hot roll mill’s profit stood at 920 yuan/mt.
SMM believes that short term iron ore prices will still be narrowly adjusted. Follow-up attention shall be paid to the actual implementation of steel mill production reduction policies.