Posted on 23 Sep 2021
As of September 18, China’s imported iron ore prices both of port inventories and seaborne cargoes under Mysteel’s assessments plunged to their new lows since May and July respectively on lower demand and the growing pessimism in the market, according to market sources. September 18 was a make-up working day in China.
Last Saturday, Mysteel SEADEX 62% Australian Fines slumped to its lowest since July 2 2020, hitting $100.2/dmt CFR Qingdao, or down $28/dmt from September 10, and on the same day, Mysteel PORTDEX 62% Australian Fines in Qingdao also touched the lowest since May 18 2020 after falling Yuan 242/wmt ($37.4/wmt) from September 10 to Yuan 726/wmt FOT and including 13% VAT.
Both the plunges were due to less consumption from the Chinese steel mills, as the blast furnace capacity utilization rate among China’s 247 steel mills under Mysteel’s survey fell to 83.74% as of September 16 or the lowest since the start of July, as reported.
China’s spot iron ore trading especially for port inventories, thus, appeared rather sluggish, as most steel mills only bought in limited quantities for immediate production needs, and iron ore traders, on the other hand, were keen to sell off their port inventories stocks at hand, according to market sources.
The outlook for iron ore demand until the end of this year appears rather passive too, according to an iron ore trader from Zhejiang of East China.
“We do expect that the curbs on steel output will be intensified further for the remainder of this year, as winter restriction will start soon (sometime in October), which will largely dampen iron ore demand and prices further,” he added.
China’s Ministry of Ecology and Environment released a draft on September 16 regarding air pollution control in the coming months of autumn and winter, which will be executed in a wider range of 64 cities and regions in the country, and the domestic steel mills will definitely among those to cut down on operations, as reported.
Mysteel SEADEX 62% Australian Fines already plunged further as of September 21, down $9.3 from September 18 to $90.9, or a new low since May 14 2020.
Meanwhile, China’s iron ore supply has been relatively stable though it may incline in the future, as suggested by Mysteel’s latest surveys, as by September 16, stocks of imported iron ore at China’s 45 ports approximated 129.8 million tonnes, or down 594,600 tonnes on week, and 177 iron ore vessels were queuing at the Chinese ports for unloading, or eight fewer on week.
Source:Mysteel Global
