WEEKLY: Negative sentiment dents China iron ore prices
Mysteel SEADEX 62% Australian Fines had dropped to $121.05/dmt CFR Qingdao on March 24, down by a total of $11.05/dmt from the prior week. By the same day, Mysteel PORTDEX 62% Australian Fines in Qingdao had slipped by Yuan 37/wmt ($5.4/wmt) on week to Yuan 900/wmt FOT and including the 13% VAT.
The sentiment prevailing in China's iron ore market became more negative during March 20-24 after the fast recovery in steel consumption seen previously had slowed further, a Shanghai-based market watcher observed.
For example, even though March-April are usually peak months for steel demand, the trading volume of construction steel comprising rebar, wire rod and bar-in-coil among 237 Chinese trading houses under Mysteel's tracking averaged just 152,758 tonnes/day over March 20-24, compared with an average of 169,563 t/d recorded during March 13-17 and 180,618 t/d during the week before that.
Also, another Mysteel survey showed that the total inventories of the five major carbon steel products comprising rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate held by the 184 Chinese steel mills Mysteel samples had thinned by a smaller 0.2% on week to 6.04 million tonnes by March 22, the fifth on-week fall.
Nevertheless, the source pointed out that last week's slowdown in steel buying among end-users and traders was because they had turned cautious when prices of finished steel had declined. Steel users in China had been unnerved by the bank collapses in the US and Switzerland, as reported.
"In fact, in the coming weeks there is still room for steel consumption to grow," he said.
The country's iron ore market fundamentals are being buoyed by the mills' higher output of hot metal and their low stocks of ore, according to him. Consequently, they will lend some support to imported iron ore prices this week.
For example, stocks of iron ore sintering fines held by the 64 sampled mills included in Mysteel's survey rose by 2.6% on week to around 11 million tonnes as of March 22, still lower by 26% on year, Mysteel's survey showed.
Written by Lea Li, liye@mysteel.com
Edited by Zhenqi Yang, yangzhenqi@mysteel.com
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