Posted on 18 Jul 2023
China's imported iron ore prices may fluctuate at high levels this week, market sources said Monday, after prices were levered up by improved market sentiment and fundamentals over July 10-14.
As of July 14, Mysteel SEADEX 62% Australian Fines had climbed by $7.5/dmt on week to $116.7/dmt CFR Qingdao. Also, by last Friday Mysteel PORTDEX 62% Australian Fines in Qingdao had risen to Yuan 896/wmt ($125.5/wmt) FOT and including the 13% VAT, Yuan 27/wmt higher on week.
China's futures markets such as those for rebar and iron ore strengthened last week, partly as China's central bank extended its policy of offering financial support to property developers and buyers until the end of 2024, Mysteel Global noted. The move gave market insiders confidence that Beijing will make further efforts to reignite the country's property sector.
Consequently, the most-traded iron ore contract on the Dalian Commodity Exchange for September closed the daytime session higher at Yuan 849/dmt on July 14, rising by Yuan 25/dmt from the settlement price on the previous Friday.
As for this week, China's imported iron ore prices may continue to hover high because market sentiment looks like staying positive this month, according to a Shanghai-based ferrous analyst.
In addition, it is hard to see steel margins among most steelmakers turn to huge losses in the near term, so they will not cut their steel output significantly over the period, he commented.
Steel consumption has cooled so far this month after the extremely high daytime temperatures shortened working hours on construction sites, the source explained. "But the supply-demand fundamentals of finished steel haven't worsened significantly," he stressed.
Mysteel's weekly tracking of stocks in traders' warehouses in the 132 Chinese cities showed that total stocks of five major finished steel items had swelled to 18.4 million tonnes by July 13, while the third on-week increase narrowed to 0.97% than those recorded during the prior two weeks. Also, the volume was 18% lower on year.
Source:Mysteel Global
