Posted on 28 Jun 2022
The growing concerns about iron ore demand among China's domestic steelmakers prevailed in the market last week and dragged ore prices down further over the June 20-24 week to half-year lows.
By June 22, Mysteel SEADEX 62% Australian Fines had slumped to a six-month low of $109.35/dmt CFR Qingdao. By June 24, the index had recovered to $114.9/dmt, but was still $6.6/dmt lower on week.
Similarly, Mysteel PORTDEX 62% Australian Fines in Qingdao also slid to a near six-month low of Yuan 781/wmt ($116.7/wmt) FOT Qingdao and including 13% VAT on June 22. By last Friday, it had edged up to Yuan 809/wmt, but was still down by Yuan 89/wmt on week.
"When steel prices declined further, many steelmakers began enduring larger losses on finished steel, and some just have no choice but to reduce their production to avoid losing more money," a Shanghai-based iron ore analyst commented.
As of June 23, China's national price of HRB400E 20mm dia rebar under Mysteel's assessment had slumped to Yuan 4,283/t including the 13% VAT, the lowest since mid-December 2020.
Mysteel's latest data showed a similar scenario, with blast furnace capacity utilization among the 247 Chinese steel mills tracked nationwide over June 17-23 finally declining after eight weeks of increases, sliding by 1.17 percentage points on week to 88.98%.
Consequently, trading for iron ore port inventories over the past week was rather sluggish, with iron ore traders also less interested in speculating on some ore quantities.
Meanwhile, trading for iron ore lumps in both the portside and seaborne markets was still inactive due to relatively sufficient supply and the flat demand, Mysteel Global observed.
Source:Mysteel Global
