A total of 0.7 million mt of iron ores was traded for the week ended May 7, during the short working week amid the Labour Day holidays in China.
During the week, market activities were muted until the return of Chinese participants later in the week and spurred the steel prices to record-high.
So far, the trades volume of PBF accounted the largest market share at 52%, then followed by BRBF at 24.29% that tied with Carajas fines at 24.29% market share.
Bullish steel demand to continue after holidays
Trade participants expected better market after holidays in view of robust steel demand and good margins.
This led most end-users to seek for medium to high grade iron ore for cost efficiency which were in tight supplies as they struggled to keep up with demand.
However, there might be some easing supplies of high-grade ores as market participants expected more Brazilian shipments after its monsoon season to arrive in China in 1-2 months period.
Meanwhile, there was some market concerns over early wet weather in southern China regions that hampered steel demand with heavy rains that disrupted logistics.
Lump premium to weaken on wet weather conditions
Lump premium continued to soften as early wet weather approached in southern China, albeit much earlier from typical monsoon season occurred during June.
However, some trade participants believed that it was too early to write off lump premium due to the high steel margins.
According to Platts, China’s domestic hot-rolled coil (HRC) margin had hit a record $177.80/mt by end-April, which propelled HRC prices to record high level toward RMB 6,000/mt.
