A total of 0.95 million mt of iron ores was traded for the week ended Mar 26, down 10.80% on-week, as the Tangshan’s output cuts discouraged market from iron ore procurement.
Some market participants expected the output restrictions to extend to other regions and thus affected the buying interests for iron ore.
During the week, the PBF accounted the largest market share at 56%, then it was followed by BRBF at 18%, and finally JMBF at 10%.
Widening price spread between high and medium grades
There was some reselling of contracted volumes due to the output restriction in Tangshan, which reduced raw material demand and shifted mills’ preference in using higher grade ores for the blast furnaces.
Then, the high demand and supply tightness of Carajas fines resulted in widening price spread between high and medium grade fines, while there was less demand for low grade fines due to stricter emission controls.
Moreover, the wet weather in northern Brazil also raised market concerns on potential shortage of Carajas fines, after Vale announced temporary suspension of Carajas passenger trains on Thursday due to safety reasons.
More supports for pellets and lumps
The strict environmental controls continued to push lump and pellet premiums to fresh new highs, amid supply tightness and high steel margins.
However, some end-users were concerned that they will be stuck with the high lump utilization rates upon any easing of the output restrictions and incurred higher costs.
Moreover, some trade participants were also more cautious on the procurement of pellets, as they expected further price corrections from an oversupply of Indian pellets in coming months.
