Texture from Platts:
An iron ore trader in China’s Shandong province expects steel mill margins to increase further before the country’s Lunar New Year holiday which starts on January 25.
Restocking of iron ore before the coldest winter months and ahead of the Lunar New Year usually supports iron ore prices, he said. But steelmakers are cautious about possible winter production curbs, which would reduce their requirements for raw materials.
The Shandong trader expects iron ore prices to fall below $80/mt CFR in December, before strengthening in early 2020 due to possible supply shortages.
An international iron ore trader said most steelmakers were keeping iron ore inventories of 7-15 days, but would gradually increase procurement if no significant winter output cut measures are announced.
Iron ore supply in November and December should be strong as Australian and Brazilian miners export as much as they can before wet weather impacts mining operations and shipments in Q1.
Seems about right to me. I don’t expect more fireworks before Q2, 2020 barring an invasion of Hong Kong.
Spot down. Paper stable. Steel softend. Ongoing restock for now.