SHANGHAI, Aug 3 (SMM) - Iron ore prices rose yesterday and closed at 807 yuan/mt, up 1.45%.
In terms of spot market, traders were less willing to ship and steel mills mainly purchased as needed, hence the market transactions were modest. The transaction prices of PB fines in Tangshan stood at 798 yuan/mt, up 3-8 yuan/mt from Aug 1. The transaction prices of PB fines and SS fines in Tangshan were 800 yuan/mt and 679 yuan/mt respectively
SMM believes that as the bears were paid off in the early stage, the iron ore prices rose mainly due to the production resumption plans.
According to SMM statistics, from July 21-Aug 1, 23 blast furnaces resumed the production and the output resumed by 97,800 mt. As of Aug 1, there were still 78 blast furnaces were under maintenance and the output decline by 283,300 mt. Recently, the profits of steel mills have greatly recovered, hence many steel mills plan to resume the production. It is expected that domestic output will continue to increase in the next period of time.
In general, as the market sentiment improves, the market holds a bullish outlook, and it is expected that the iron ore futures will further increase. In terms of fundamentals, as the supply is still loose, the production resumes slowly and the increase in output is limited, hence the demand for imported iron ore is weak. In addition, due to the decline of BDI, SMM believes that in the short term, the iron ore prices may fluctuate.