A total of 0.88 million mt of iron ores was traded for the week ended Mar 12, down 17.01% on-week from previous week trade volumes, due to the stricter output curb in Tangshan.
Hence, steel prices continued to rally on reduced production, while demand remained high in China, while iron ore buyers were more cautious on the possibility of extended output cut to improve air quality.
During the week, the Yandi fines accounted the largest market share at 22%, then it was followed by SSF at 21%, and finally both BRBF and Carajas fines at 19%.
Buy the dips in anticipation for better steel demand
Due to better steel margins, some buyers began to buy the dips after recent price corrections and expected better steel demand after the production restriction is lifted in Tangshan.
The buyers preferred fixed price cargoes over floating price cargoes, and sought for medium grade fines, amid healthy steel margins.
However, some trade participants expected more competitive pricings for Brazilian high grade fines, as supply improved toward the end of monsoon season in Brazil.
Sintering cuts to support lump premium
Due to the sintering cut, there is strong demand for lump for the use of direct feed for steel production, while lump supply remains limited at port, which supported higher premium.
Besides lump, pellet demand also received much support, while there were market talks of better supply from India to meet higher Chinese pellet demand.
In the meantime, Chinese buyers were also interested in low grade fines, due to lower coke prices that allowed more tolerances for impurities in iron ore feedstocks at the blast furnace mix.
