By CRU Senior Analyst Erik Hedborg, from CRU’s Raw Materials Monitor
The iron ore price has risen again in the past week as offloading activities have continued while demand from China’s steel mills has been robust. On Tuesday, Sept. 1, CRU has assessed the 62% Fe fines price at $124.5 /dmt, up by $1.5 /dmt w/w.
Last week, Chinese sheet products demand was stable, but the HRC price dropped after peaking at a two-year high of RMB4,090 /t in the previous week. Construction steel performed differently with underlying demand softened w/w while prices changed little. However, the prices of both products rose on Monday after a message came out over the weekend that the Tangshan government would tighten the enforcement of operating restrictions on BF, sinter capacity and independent rolling mills. At the time of this writing, we have yet seen any significant restrictions on BFs, but sinter capacity utilization was heard to have dropped since last week.
Because of lower sinter fines demand in Tangshan, iron ore port outflow slightly dropped last week, helping build up port inventories. As most of inventory increases were Brazilian products, its share has now risen to 26 percent from the recent low of 20 percent in May, while the Australian share has now declined to 51 percent from 58 percent. Our contacts told us that steel mills in Tangshan expected current operating restrictions to be short-term, so they did not plan to immediately shift to higher lump rates.
Seaborne supply was mixed in the past week, with Port Hedland and northern Brazil shipping at a high rate while southern Brazil and Rio Tinto saw lower shipments. Maintenance at Rio Tinto’s Dampier port resulted in shipments being affected between Aug. 28-30. South Africa, which accounts for ~4 percent of seaborne iron ore supply, has seen an increase in shipments at end-August as the country loosened its lockdown restrictions. Shipments in the past week were the highest since March and our sources mention an increase in rail capacity as the reason for the rise.
In the coming week, we maintain the view that iron ore prices should fall based on supply and demand fundamentals. Steel margins have taken a negative turn in the past week, while inventories of steel and iron ore have risen in the past week.
Request more information about this topic.
Learn more about CRU’s services at www.crugroup.com
Erik HedborgRead more from Erik Hedborg
Latest in Steel Products Prices North America
HRC vs. CRC price spread jumps in second week of new year
The spread between cold-rolled coil (CRC) and hot-rolled coil (HRC) prices jumped during the week of Jan. 8 as cold rolled tags continued to rise while hot rolled tags held steady.
Cliffs increases sheet prices again, seeks $1,150/ton HRC
Cleveland-Cliffs is now targeting base prices of $1,150 per ton for hot-rolled coil (HRC), according to a press release on Wednesday morning, Jan. 3.
Cliffs moves sheet prices higher, seeks $1,100/ton HRC
Cleveland-Cliffs is now targeting base prices of $1,100 per ton ($55 per cwt) for hot-rolled coil (HRC).
SMU price ranges: Sheet surge continues on limited spot availability
Sheet prices shot higher again this week on the heels of another round of mill price increases as well as on reports of production and supply chain issues at certain domestic producers.
Galvanized Sheet’s Premium Over Hot Rolled Hovering Around $200/Ton
The spread between hot-rolled coil (HRC) and galvanized sheet base prices has been hovering near $200 per net ton since late July, according to SMU’s latest analysis.