China / Iron Ore
After a two-day decline, Australian 62% Fe iron ore fnes regained ground by the end of the week, rising $1.5/t over a day and $2.5/t over fve days to $78.5/t CFR. “Iron ore holds strong now, but the key question is whether it can remain as strong in September.To know that, we have to keep an eye on the steel market,” a market source told Metal Expert.
In anticipation of the price softening and as sky-high prices have left them with almost no returns, steel traders have recently been avoiding purchases, a sign considered by some as a starting point for a downtrend.Through 2017 billet in Tangshan region has climbed $154/t (RMB 1,030/t) so far. On the other hand, steel prices, which have been on the rise since the start of the year thanks to construction and infrastructure stimulus initiated by Beijing, will continue to remain high in September, when building gains pace along with cooler temperatures, analysts believe. According to CLSA, recently there has been an “acceleration in orders from leading infrastructure companies for PPP [public-private partnership] projects,” Reuters reports.
Talking about the iron ore market, the demand stays strong thanks to high steel production and mills’ robust margins.
At the same time, the buying has mainly shifted to the highgrade ingredient segment that technically softens oversupply pressure.
Stockpiles at ports at 134.7 million t as of Friday has posted a decent decrease from this year’s peak of more than 140 million t at the expense of high-grade material elimination, while the volume of 58% Fe and below remains huge.
“I seeAugust ending at a positive note and as for September, I believe the market will not move too much from this month’s average, maybe $2-3/t,” an insider said.
Source: World steel news
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