A total of 1,160,000 mt of iron ores was traded for the week ended Jan 15, around half of the volume compared to last week, due to market uncertainty over slow steel demand.
Furthermore, market participants were concerned about rising coronavirus cases in Hebei, the steel-making hub province of China. Though, there was no report of impact on steel production, but the transportation restriction on trucks resulted in high stockpiles of finished steels in mills.
During the week, BRBF accounted the largest market share at 29%, then it was followed by Carajas fines at 16%, which was on par with Jimblebar fines at 16% of the market share too.
High grade ores prefer for higher productivity
Many Chinese mills preferred to purchase feedstocks with higher Fe content, which improved productivity and saved costs in reducing the expensive coke usage.
Thus, high grade ores like Carajas fines were popular among end-users as well, especially among the mills using low grade -high grade ores combination in the blast furnace mix.
However, the Carajas fines were in tight supply and this led many buyers to turn to BRBF as its substitute, which were cheaper and had more availability in the spot market.
Newman fines were popularity with buyers as well, due to its comparable silica and alumina contents to that of PBF among the medium grade fines products.
Stricter transportation restriction from rising Covid-19 cases in Hebei
Truck transportation restriction were heard to be more severe in Shijiazhuang, Hebei province due to the recent outbreak of coronavirus pandemic in the region.
Moreover, the truck transportation for iron ore was heard to be reduced in favor of railway transportation in Hebei, which caused some delivery issues in the distribution of finished steel products from mills to end-users.
The transportation restriction measures also resulted the cost of truck freight to rise sharply in transportation of goods from Shanxi to Tangshan, Hebei province.
