Iron Ore Market in Brief: Market slowed down due to China Holiday, with rise in Tangshan prices for mills restrictions
Physical iron ore trading slowed on Tuesday April 30 ahead of the May Day holiday in China on May 1-4, while prices strengthened on news of production restrictions on mills in Tangshan.
KEY DRIVERS
Late on Monday news emerged that the authorities in the northern steel hub of Tangshan had decided to impose production restrictions on local industries for the whole month of May to reduce
emissions.
Measures on steelmakers include a 50% cap on sintering and pelletizing facilities, blast furnaces and basic oxygen furnaces, along with a cap of 80% at named mills, market participants said. A mill source in the city confirmed on Tuesday that the local government had issued a notice, but said the restrictions were focused on the sintering and pelletizing processes.
China’s rebar and hot-rolled coil futures markets responded to the news with a jump on Monday night, before staying range-bound on Tuesday. The country’s benchmark iron ore futures contract dipped briefly on Monday night and then largely trended upward to end Tuesday 2.1% higher than the previous day’s settlement level.
Spot rebar and HRC prices in China also picked up 20-50 Yuan (USD 3-7.40) per ton during the day.
Spot iron ore trading activity at Chinese ports cooled down in the day with mills largely finished with pre-holiday restocking. A seaborne cargo of Pilbara Blend fines and a shipment of Yandi fines were sold by miners at prices stronger than the last traded levels.
Chinese buyers made more inquiries for Indian pellet cargoes during the day, most likely in expectation of increasing demand next month due to the Tangshan sintering and pelletizing restrictions, according to sources.
Daily MB 62% Fe Iron Ore Index rose by USD 0.12 per ton, while the daily MB 65% Fe Iron Ore Index increased by USD 0.50 per ton.
QUOTE OF THE DAY
“Steelmaking restrictions have generally been more seriously exercised this year. So the latest Tangshan restrictions announced for May are leading to positive sentiment for steel prices, which
would then support iron ore prices,” a mill source in north China told.
Report By: Shahriar Yusefi
