SHANGHAI, Mar 28 (SMM) - Last week, due to the pandemic-related transportation restriction in Tangshan and Shandong, the purchasing demand of steel mills reduced, which further caused the drop in iron ore prices. Areas closely following the prices of foreign iron ores saw reduction of 80-100 yuan/mt, such as Shandong, Anhui and south Hebei. The prices in less affected areas increased slightly.
In Tangshan, truck transportation that is the main way for many steel mills to transfer goods was stopped because of the pandemic, which led to the inability of steel mills to purchase raw materials, such as iron ore, coke and limestone. Therefore, the iron ore market in Tangshan last week was basically stagnant. Steels mills were closed for a long time, and some steel mills have to idle the furnace due to the lack of raw materials, which caused a decrease in the demand for iron ore. SMM expects that iron ore prices in Tangshan will fluctuate because the COVID-19 outbreak in Tangshan still shows no signs of improvement at present. In Liaoning, the pandemic-related transportation restriction is also strict. The local state-owned steel mills planned to overhaul two blast furnaces due to the influence of logistics, and the demand for iron ore increased. However, the inventories of mines increased because of the normal operation of dressing process. All in all, SMM expects that the prices of iron concentrate in Liaoning will decline slightly.
SMM expects that prices of iron ore in China will decline slightly this week, mainly because of the uncertainty centering the demand, steel mill production and raw material transportation brought about by the pandemic.
