Spot Imported Iron Ore Prices at Chinese Ports to Extend Gains

SHANHGAI, Aug 30 (SMM) - Prices of iron ore futures and imported iron ore at domestic ports bottomed out last week following the unleash of bearish sentiment and due to stable demand from steel mills who are not subject to production restrictions. Spot prices of mainstream medium-grade iron ore fines at domestic ports rose by 15-40 yuan/mt last week.

Steel mills still favour mainstream medium and high-grade ore amid high coke prices, which will slightly boost imported ore prices. PB fines, in particular, will be the most popular product among steel mills. Although some steel plants have carried out blast furnace maintenance recently, the overall impact on pig iron output is limited as some blast furnaces have come back online following maintenance. Iron ore demand is expected to maintain the current level if there is no new round of production restrictions.

However, as port inventory continues to accumulate and shipments from Australia and Brazil increased during August 16-22, the upside room of iron ore prices is likely to be limited.