Posted on 18 Aug 2021
China’s iron ore market sentiment appeared still rather flagging over the August 9-13 week, as buying from the steelmakers had been tepid and spot imported iron ore prices slid further on week.
As of August 13, Mysteel SEADEX 62% Australian Fines dropped to a new low since March 25, or down $10.1/dmt on week to $160.75/dmt CFR Qingdao, and Mysteel PORTDEX 62% Australian Fines in Qingdao declined by a similar degree, down Yuan 90/wmt ($13.9/wmt) on week to Yuan 1,140/wmt FOT and including 13% VAT, a new low since April 1.
“Meanwhile, the limited buying in the iron ore spot market has been from steelmakers, but even they have been rather prudent in buying as the prices have been on a downtrend,” commented an iron ore trader from East China’s Shandong provinces.
“Many Chinese steel producers, thus, prefer to replenish from the port inventories and in small quantities,” he added.
As for the seaborne trading, Chinese steel mills’ buying were rather inactive with some even re-selling the surplus from their long-term deal supplies, market sources shared.
Mysteel’s latest data did show that by August 12 inventories of imported iron ore in all forms at the 247 mills including all the volumes at steelworks, port stockyards and on the water decreased for the third week by 265,600 tonnes to 107.4 million tonnes.
In the context of the weary market sentiment, Chinese iron ore traders, thus, had been focusing on lightening their stocks instead of booking new orders especially when the market seemed still enveloped by pessimism in the near term.
“If you are trading both in the spot and futures markets, it is fine, but if you just deal in spot cargoes, the exposure to price turbulence is big and rather risky especially when price tumbles,” the iron ore trader commented.
As of last week, lower- to medium grade iron ore fines were still more popular among the Chinese steel mills while lump demand was lacklustre as steel producers were not chasing productivity amid production trimming, Mysteel Global noted from the market sources.
Source:Mysteel Global
