Imported Iron Ore Prices to Fluctuate Widely this week

Published: Feb 6, 2023 09:54

Source: SMM

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During the Chinese New Year (CNY) holiday, steel mills mainly consumed their in-house iron ore stocks.

SHANGHAI, Feb 6 (SMM) - During the Chinese New Year (CNY) holiday, steel mills mainly consumed their in-house iron ore stocks. In the first week after the holiday, some steel mills ramped up the restocking efforts on rigid demand. The active spot trades in the iron ore market underpinned the iron ore prices. In addition, more favourable policies to boost the real estate sector were introduced during the holiday, thus the restored market confidence fuelled the most-traded DCE 2205 iron ore to open 20 yuan/mt higher on the first trading day after the CNY holiday. However, the demand for finished products has not yet recovered, leading to a sharper increase in finished product inventory. This, coupled with the impact of the Fed's interest rate hike, weighed on iron ore prices. Generally, the iron ore prices fell last week. In terms of spot prices at ports, the spot prices of PB fines in Shandong added 20-30 yuan/mt on the week.

ØAs for this week, the shipments from Australia and Brazil will remain at low levels due to the rainy season. At the same time, the domestic iron ore production will not restore. Therefore, the overall supply of iron ore is likely to be tight. The steel mills have been active in production based on expectations for stronger end demand. And some blast furnaces are scheduled to resume the production soon, which will continue to boost the demand for iron ore. Considering the demand for finished products has not materialise and that the government regulation is still strict, the iron ore prices are expected to be volatile this week.

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