A total of 1.237 million mt of iron ore was exchanged hands for the week ended Aug 28, lowered than the 2.035 million mt recorded last week.
Low grade fines took the centerstage this week, as Yandi fines accounted the most transacted at 22.63%, followed by Jimblebar fines at 16.17%, then SFM1 at 14.32% and finally PBF at 13.74%.
Despite the lower transaction volume, the Chinese port inventory continued to rise at 113.1 million tonnes, up 687,600 mt week-on-week, according to Mysteel.
Growing demand for low grade ores
Due to environmental controls in Tangshan, there were more enquiries on high grade fines, lump, pellet and concentrates.
Low grade ores were in higher demand too, as some mills tried to reduce dependency on medium grade ores. Thus, some mills with flexible in blast furnace mix will try to increase their blending for high grade fines with lower grade fines instead.
Moreover, there was more demand for Indian low-grade fines as well, as it was heard to have growing number of Indian fines shipment heading toward China.
Higher steel output in September
As the rainy season came to end in China, some trade participants expect the high crude steel production seen at mid-August to carry over to September as well.
According to China Iron & Steel Association (CISA), China produced an average of 2.98 million mt of crude steel per day during the Aug 10-20 period, up 5.34% on yearly basis.
The higher daily output was driven by strong infrastructure construction activities as the sector normally peaks during the Sep-Oct period.
