Iron ore prices fell on Friday after hitting their highest level since September 2011, as a survey of post-Lunar New Year inventories of steel products in China showed a significant increase, dampening hopes for mills to ramp up output following the week-long holiday.
According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China (CFR Qingdao) were changing hands for $173.55 a tonne, down 0.85% from Thursday’s trade.
Consumption among steel end-users stagnated during the February 11-17 holiday while mills continued to produce during the break, Mysteel reported.
“Previously, the market had expectations for better post-holiday demand,” said analysts at Sinosteel Futures in a note, but added demand does not usually pick up until after China’s Lantern Festival, which falls on February 26.
Shares of BHP and Rio Tinto have gone up by 12.8% and 15.9% YTD respectively
Concerns about tight supply and brightening prospects for demand outside top steel producer China should continue supporting iron ore prices, analysts said.
On Tuesday, BHP Group said it expected a continuation of strong Chinese demand in 2021, and a recovery in global crude steel production.
Shares of BHP and Rio Tinto have risen by 7.5% and 6.8% over the week, respectively, and Vale is up 3.4% since last Friday.
“Not only in China, but the ex-China activity is also picking up to pre-covid levels,” Fortescue Metals Group Chief Executive Elizabeth Gaines said during a media conference call. The company shares have risen 0.58% over the week.
“Our view is that the market will remain robust for some time,” Gaines said.
(With files from Reuters)
