A total of 1.07 million mt of iron ores was traded for the week ended Mar 5, up 44.59% on-week from previous week trade volumes, as most Chinese participants geared up for the construction season in March.
However, some market uncertainty rose during the week, due to the commencement of China’s Two Sessions meeting as trade participants waited eagerly for any steel-related policies.
Meanwhile, the Carajas fines accounted the largest market share at 36% for the week, then it was followed by Jimblebar fines at 24%, and finally PBF at 16%.
Recovering steel margins to support procurement of high grade fines
Due to better steel margins, more mills were seeking high grade fines like Carajas fines to blend with concentrates, amid reduced steel output in Tangshan.
However, the demand of medium grade fines, like PBF and Jimblebar fines had been popular among buyers as well, though some mills were heard to be reselling some of the term cargoes of medium grade fines for the high premiums.
Meanwhile, some mills were considered in using Indian low-grade fines for blending with concentrate, due to more improved supply condition in India and cheaper coke prices in domestic China that allowed more tolerance for impurity in feedstocks.
Lump premium supports by supply tightness
Lump premiums remain supported by supply tightness and sintering restrictions in Tangshan, where several blast furnaces were shut down in March.
However, trade participants expected the premiums to drop further after winter season when normally there will be some easing of sintering controls.
Market participants also expected pellet premium to defy seasonal lull in March and might continue to strengthen in Q2, amid high iron ore fines prices.
