In the marine iron ore concentrate market, the demand for pellets has eased concerns about a further decline in steel production in China. According to sources, while the price of marine iron ore concentrate has fallen. But the price of pellets has been rising in the week ending Friday, September 3, on the other hand, demand has fallen due to fears of further decline in steel production in most Chinese provinces. In the following, we will evaluate the prices of the Chinese steel market. Please be with Artan Press.
*** Latest marine iron ore trading rates
First, we will take a look at iron ore indices from a fast market perspective. The price of 66% iron ore concentrate from Qingdao port in CFR format was $ 164 per ton. This product has decreased by $ 1.97 per ton. Iron ore granite also recorded a decrease of more than 65% in pure iron fines by half a dollar per ton. This product was priced at $ 33 per ton. The port’s 66 percent iron ore concentrate also saw a drop in prices of about $ 2 per tonne. The decline in China’s offshore iron ore transactions is noticeable.
*** Reduce offers to buy marine iron ore
Sources told FastMark that suggestions have been made that the Chinese government could hold a meeting this week to examine the impact of declining steel production in certain provinces in July and August. According to sources, this could lead to steel mills meeting their annual production reduction targets by the end of November and then inspections in December. A trade source in Shanghai said this has raised concerns about further declines in steel production in the coming months. The outlook for iron ore demand – especially for high-purity materials – has fallen, resulting in lower concentrate prices due to limited liquidity in the market. China’s offshore iron ore prices are under increasing pressure as bids fall in China.
*** China’s domestic concentrate inventory grows over time
In addition, China’s domestic concentrate sources are increasing month by month. This can attract buyers and further reduce the demand for sea freight. Guangxi province has reduced crude steel production to less than 2.3 million tonnes by September. About 30 percent less than the monthly average of 3.27 million tons in the first half of 2021. Nine steelmakers in northeast China have ordered a cut in steel production. The rise in concentrate inventories could be the reason for the drop in Chinese marine iron ore prices.
*** Decreased demand for premium iron ore in the Chinese market
Demand for premium iron ore has fallen, a commercial source in northern China said. Because most steelmakers in China are forced to cut steel production by the end of 2021. A shipment of pellet feed from the Brazilian mine Vale for its pellet plant in Oman, which mainly targeted the European market, was probably transported to China due to a reduction in pellet premiums in Europe. A trading source in Singapore said the deal was made at a significant discount, which means weakening demand for premium iron ore in the Chinese market. Offshore iron ore trading will also be accompanied by declining demand.
*** Strong pellet demand in the Indian market
Domestic demand for pellets in India has been very strong, said a Hong Kong source. So fewer Indian pellet offers to China were heard last week. Few bids were made at relatively high prices. A trade source in southern China said, however, that offers were very limited and no offshore deals were heard. In weaker market conditions and declining demand from major buyers in Asia and Europe, Wall will increase its premium for blast furnace (BF) and direct (DR) iron ore pellets for the fourth quarter of 2021 to $ 47 per tonne and $ 50, respectively. The dollar has fallen in tons. Pellet demand could signal China’s offshore iron ore market.
“The stock of iron ore pellets in Chinese ports is increasing week by week,” said one analyst in Shanghai. Steel mills have lost interest in buying, and iron ore pellets are closely linked to China’s offshore iron ore market.
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