by Chris Becker

The iron ore complex was not buoyed by positive statements from the US and China trade delegations yesterday, with spot prices in Tianjin plus Dalian futures falling as restocking levels are not as strong as expected following the Lunar New Year holiday:

More on the restocking from SPGlobal:

Traded levels for Australian Pilbara Blend fines, the most heavily imported iron ore brand in China, surged above Yuan 600 /wmt at end January from around Yuan 560/wmt in mid-January on speculative activity and a strong paper market amid concerns of disrupted supply from Brazil after a dam collapse.

Although prices at the northern ports have since eased from a peak of Yuan 684/wmt on February 11, they remain well above Yuan 600/wmt, adding to strong cost pressure on mills that were already grappling with slim steel margins.

“End-users are looking to keep production levels low as Pilbara Blend fines offers are still at very high levels,” a source at a mill in northern China said Monday.

It’s not just the Brazilian supply problems, but also environmental and safety concerns dampening production. Texture from Reuters:

Price falling on steelmaking raw ingredients also came as top steelmaking city Tangshan extended second-level smog alert to Mar 2 from scheduled Feb 25 due to adverse weather condition, according to a statement from local government on Monday.

Steel mills need to cut at least 30 percent production during the alert period.

On Saturday, an accident at a non-ferrous mine at a subsidiary of Inner Mongolia Xingye Mining Co killed 21 people and injured 29.

Xinye has been ordered by local authorities to halt production, and analysts say the accident may lead to safety checks across the region, affecting operations at more mines.

Daily iron ore price update (restocking concerns)