A total of 1.5 million mt of iron ores was traded for the week ended Oct 16, up almost 8.7% week-on-week as compared to the 1.38 million mt recorded as of Sep 30.
The uptick in trading volumes was due to the return of Chinese participants from the weeklong National Day holidays in early October.
Pilbara Blend fines (PBF) once again accounted more than one third of the market shares at 34%, then followed by BRBF at 23%, and then Mac fines came for the third spot at 13% for the Oct 12 – Oct 16 period.
Slower steel demand and second wave of coronavirus outbreak
Despite the good volume of seaborne trades, the market participants were worried over slowing steel demand and the second wave of pandemic outbreak that limited steel demand recovery among the European countries.
With slower steel demand, the steel margins became thinner and resulted some steel mills to keep low inventory of iron ores.
This then led to lower premium for the mainstream Pilbara Blend fines especially for November loading.
More pellet demand ahead
Pellet demand is expected to rise among Chinese steelmakers due to lower pellet supply in domestic markets.
Thus, some Chinese mills were heard to be stocking up for imported pellets and sintered ores in preparation for tightening of sintering controls in the upcoming winter season.
However, the alternative direct feed option like lump may see a much slower price recovery due to high inventory and firm supply, according to trade sources.