Since the Beginning of Last Week, Steel Mills in Some Areas Have Seen Their Finished Product Inventory Accumulate Severely Due to Slack Demand

SHANGHAI, May 4 (SMM) - To cope with this situation, steel mills in Shaanxi, Shanxi and Sichuan have started a new round of intensive maintenance on their blast furnaces. In particular, blast furnaces under maintenance in Shanxi outnumbered other regions.  As a consequence, the demand for iron ore dropped sharply early last week, so did its prices. However, pig iron production remained high compared with the same period last year. This, combined with stocking ahead of the Labour Day holiday, drove iron ore prices to rebound later in the week. The spot prices of PB fines at ports in Shandong lost 60-70 yuan/mt on a weekly basis. Looking into this week, although Australia's shipments will continue to increase, port arrivals may decline as previous shipments were hindered by hurricane in the country. Daily average shipments from domestic ports have been relatively high recently. As such, port inventory is expected to extend declines. Some steel mills with low inventory will restock after the week-long holiday. Considering that steel demand will basically stagnate during the holiday and the US Federal Reserve will probably raise interest rate soon, iron ore prices may face downward pressure after the holiday.