Iron ore market swung on a bearish note last week. The holidays had little impact on iron ore supply, with high shipments and port arrivals, while slumping demand during the holidays made a big dent in shipments from ports. Therefore, iron ore stocks at the ports piled up rapidly. In addition, rain and snow in many places of China slowed down restart of terminal sectors, adding higher inventory pressure on steel mills, thereby leading to maintenance of more BFs. Therefore, falling pig iron production gently scaled back iron ore demand. Moreover, market sentiment was bearish. Iron ore prices kept dropping. In terms of spot prices at ports, spot prices of PB fines in Shandong dropped by 21 yuan/mt from pre-holiday level.
Looking at this week, overseas shipments may tick down amid fallout of hurricanes in Western Australia and heavy rains in Brazil, but port arrivals may still remain high. According to maintenance of BFs tracked by SMM, planned restart of some BFs will leave pig iron output with a small uptick. Moreover, most steel mills who had mainly consumed inventory will have more replenishing demand. Under this circumstance, iron ore prices may remain low, given slack seasonal demand and bearish market sentiment.
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