Stocks of 4 types of iron ore at 10 major Chinese ports still diverged

According to SMM data, iron ore stocks across ten major ports in China totalled 110.09 million mt as of April 26, up 1.18 million mt WoW. Stocks by ore type and their WoW: fines (80.26 million mt, +250,000 mt); concentrate (10.24 million mt, +340,000 mt), lump (14.41 million mt, +700,000 mt), and pellet (5.18 million mt, -110,000 mt).

Steel mills' output of pig iron increased amid improved profits, boosting iron ore picked up from the ports, but inventories at the ports still climbed amid dramatically rising port arrivals. As rapidly increasing raw material prices squeezed steel mills' profits, their purchases of more expensive iron ore metals such as lumps slowed down, resulting in mounting inventory, while pellet inventory fell slightly amid robust demand.

Looking at next week, according to current tracking of operating rates of BFs, daily average output of pig iron will still move up, which may boost demand. However, ore stocks at the ports may trend up again amid profit squeeze and high port arrivals. Given that the cost-effectiveness of different types of iron ore varies, stocks of the four major types may still diverge.