A total of 1,480,000 mt of iron ores was traded for the week ended Jan 22, up almost 28% as compared to previous week, amid the pre-Lunar New Year restocking activities.
During the week, the market participants were concerned cyclone development in Australia, and the aftermath of fire incident in Vale’s Ponta do Madeira iron ore terminal.
PBF accounted the largest market share at 64% for the week, then it was followed by Carajas fines at 13%, and finally by BRBF at 12%.
More procurement before worsening supply tightness
Market participants were worried on potential supply disruption from worsening cyclones development in Australia, as vessels were cleared off Port Hedland to mitigate shipping risks.
According to Australia’s Bureau of Meteorology (BoM), the tropical low system might develop to either Category 1 or 2 cyclone making landfall on Pilbara coast by late Friday or early Saturday.
Thus, some buyers preferred to snap up iron ore cargoes before more cyclones occurred, which threatened the iron ore production and shipping operations in the region.
More mills’ maintenance ahead due to narrowing margins
Chinese mills were heard to commence plant maintenances, due to the narrowing steel margins caused by the high raw material costs.
There was rising transportation costs as well, as truck transportation costs were heard to rise by almost RMB 300 for delivering raw materials from Shanxi to the steel mills in Hebei.
Thus, many Hebei-based steel mills were heard to bring forward their maintenance period in view of higher transportation costs and the rising coronavirus cases in the province.
