A total of 1.87 million mt of iron ores was traded for the week ended Jan 21, up 65.49% on-week, as buyers rushed for purchases before Lunar New Year holidays.
Most of the purchases were scheduled for delivery in late February and early March, as market participants believed that the steel demand will pick up from there after the output curbs for the Winter Olympics.
During the week, the trades volume of Yandi fines accounted the largest market share at 28%, then followed by PBF at 18%, and then Mac fines at 14%.
Better steel demand expected after the Winter Olympics
Buyers’ interests were centered mainly at March arrival cargoes for low and medium grade fines, as market participants expected more steel production in March, after the Winter Olympics, according to Platts report.
However, some trade sources stated that low grade fines and lump still remained profitable after import margins, while the import margins were thinner or even resulted in losses for medium grade fines and high grade fines.
In the meantime, the prices of high grade fines like Carajas fines continued its upward hike in view of wet weather in Brazil that disrupted production and shipments, though some market participants expected the price upticks may reach its peak already, due to the narrowing steel margins.
More stimulus measures to spur steel demand
The recent lowering of Chinese bank rates had also spurred better buying activities, as part of the country’s strategy to boost economic activities and boost the demand outlook after Lunar New Year holidays.
Hence, some trade participants expected the Chinese government to introduce more stimulus package or easing of fiscal policies during the first half of year to stabilize its economy after the poor performance seen in the property market.
Despite the lower market sentiment on construction sector, there was some improvement in manufacturing sector for steel consumption that might drive growth during Q1.
