Posted on 08 Feb 2022
Chinese prices of imported iron ore in the seaborne iron ore market climbed higher during the Chinese New Year (CNY) holiday over January 31-February 6, reflecting optimistic market sentiment regarding ore demand after the long break, according to Mysteel's latest report released on February 6.
As of February 4, Mysteel SEADEX 62% Australian Fines had jumped to $145.1/dmt CFR Qingdao, or higher by $7.2/dmt compared with the price of January 31, the assessment shows. Though China was still officially on CNY holiday, last Friday was a business day for some iron ore market players.
The trading of iron ore port inventories and seaborne cargos all but ceased during the break, as most China's participants were enjoying CNY festivities and most steelmakers had stocked up enough additional tonnage for their steady production throughout the period.
Nevertheless, sentiment among iron ore traders canvassed by Mysteel on Sunday was still relatively optimistic, buoyed by hopes that many steelmakers would replenish their internal stocks to normal levels after the long holiday.
"We are still confident about ore demand after the holiday and through the coming March," a Shandong-based iron ore trader in East China. "We have some stocks at hand, and lower-aluminum iron ore products are our priority, as availability of this ore is relatively limited," he told Mysteel, adding however that his firm did not trade any tonnage on overseas futures markets last week.
Most Chinese steelmakers normally operate as usual during the CNY holiday, and some surveyed by Mysteel confirmed plans to procure ore quantities after the break. However, as of Monday the buying seemed not so urgent.
"We did not procure ore during the holiday, but as we need to observe more production curbs during the Winter Olympic Games period, the drawdown in our internal ore stocks will be more gradual," an official with a steelmaker in North China's Hebei province said. "And in the meantime, we'll monitor the market to see when it might be best to replenish some tonnage if we need to."
The Winter Olympic Games are currently underway in Beijing, in nearby Yanqing, and in Zhangjiakou in North China's Hebei province, and will continue till February 20.
An official with a steel mill in South China confirmed that the mill remained in normal production during the holiday, with the internal ore stocks at the plant being sufficient for 20 days of consumption. "We plan to buy some port inventories soon, as our seaborne cargoes have not yet arrived," he remarked.
According to the survey Mysteel conducted among 79 steelmakers and 31 iron ore traders on February 6, most mills in South China maintained normal production last week while mills in North China, especially in Hebei province, saw more curbs imposed on their blast furnace operations. In general, though most mills' internal iron ore stocks have declined, the extent of the fall was less than that recorded in the same period last year.
Source:Mysteel Global
