Iron Ore Prices Maintained Upside Momentum on Pre-Holiday Restocking

SHANGHAI, Apr 27 (SMM) - In the experience of sharp drop on "black" Monday, ferrous products prices warmed up Tuesday, and stopped falling in overnight trading. Iron ore futures once gained 3% in morning trading today, and fell slightly in the afternoon session, but maintained a gain of more than 1%, opening to the prelude of the pre-holiday restocking period.

With the approach of the Labour Day holiday, traders are more active in shipping, and steel mills restock on demand. The overall market turnover has improved significantly. According to SMM data, the transaction prices of PB fines in Shandong are mostly at 923-930 yuan/mt, up 5-10 yuan/mt compared with the previous day. The transaction prices of SSF in Shandong are 693-710 yuan/mt, up 20-30 yuan/mt from a day ago. PB fines in Tangshan are traded at 925-930 yuan/mt, up 5-10 yuan/mt from the previous day. SSF in Tangshan is sold at 700-705 yuan/mt, and the prices rise by 20-25 yuan/mt compared with the previous day.

On the fundamentals, the arrivals at ports are expected to be 12.246 million mt in the latest session, which is 250,000 mt less than the previous session and 36,000 mt more than the same period last year. During the period, shipments from Australia fall by 450,000 mt to 18.01 million mt, an increase of 4.3 million mt compared to the same period last year; those from Brazil climb by 580,000 mt to 6.1 million mt, an increase of 590,000 mt compared to the same period last year.

Recent shipments from Australia and Brazil have reached normal levels, and the arrivals are relatively stable. At present, the domestic blast furnace operating rates are still low due to the COVID. However, considering the approach of the Labour Day holiday, steel mills may have higher restocking demand, which will offer some support to ore prices. As such, SMM believes that this week, iron ore prices will remain strong, and may move rangebound after the Labour Day holiday. The market shall still pay attention to market changes.