Posted on 28 Dec 2021
The recent market optimism for a near-term iron ore demand recovery among Chinese steelmakers saw iron ore futures on the Dalian Commodity Exchange (DCE) climb for the fifth week over December 20-24, with the bourse's most-traded May 2022 iron ore contract ending the daytime trading session at Yuan 713.5/dmt ($112/dmt) on December 24, or up Yuan 31/dmt from the settlement price on December 17.
"There is high expectation for iron ore demand to recover in the near future, and such strong market sentiment has firmly bolstered the iron ore prices, especially in the futures market, though steel output remains rather low for the moment," a Shanghai-based iron ore trader said.
According to him, profit margins among domestic steelmakers have been recovering, and this has lent support to key steelmaking raw materials prices. What's more, many steel producers will also need to stock up more iron ore for the upcoming holidays including the New Year and the Chinese New Year breaks.
Meanwhile, the Chinese steel market outlook in 2022 has become more promising with the recent release of some positive signals from the central government, and this has also bolstered the raw materials prices, Mysteel Global noted from other sources.
As for the supply side, iron ore port inventories under Mysteel's tracking showed signs of decline over the past week, which also supported the ore prices, according to market sources.
During the latest survey period, total imported iron ore stocks at the 45 Chinese ports thinned by 1.8 million tonnes or 1.2% on week to 155.1 million tonnes after the 12 prior weeks of increases, mainly due to the higher daily discharge rates.
Source:Mysteel Global
