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Iron Ore Market China

My Steel Feature: China raw material supplies up, and steel?

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Heavy-duty trucking needs more time back to full mode

When steelmaking raw materials transportation by water and by rail has been steadily and gradually recovering to their normal levels since early February especially in the past two weeks, iron ore transhipment from sea ports to the ports along the Yangtze River had been running as per normal now, a Shanghai-based industrial source said.

Trucking especially inter-province transportation, however, has remained an issue, as road transportation has been hit more severely by epidemic, which many highways blocked all the way until the past week or so.

To encourage more heavy-duty trucks back on road, China’s Ministry of Transportation has removed tolling fees on all the highways since February 17, requesting the provincial and regional authorities to remove the road blocks.

Some Chinese steel mills may feel the inconvenience less keenly due to their heavy reliance on rail or different locations, Mysteel Global noted.

“Most of our iron ore and coal are sent to our plant by rail, so our blast furnaces have not been seriously affected by lack of trucks,” an official from a Shanxi-based steel plant shared, though, their ferroalloys supplies, most by truck, had been disrupted and not much improvement had been detected yet, according to him.

An iron ore procurement official from a steel mill in Hebei of North China shared, though, that, their iron ore trucking “has returned to normal recently especially when many highways have reopened for traffic with no charges”…Full Story

China launches iron ore and other options to back commodity trade

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By Xie Jun and Qi Xijia Source | Global Times

China has just given the long-awaited green light to the trading of new commodity options including iron ore and rapeseed meal, part of a move to enrich the domestic derivatives market to supplement the nation’s expanding commodity trade, experts said on Monday. 

The enrichment of hedging tools like options and futures will pave the way for China to play a more decisive role in pricing commodities, they said. 

The Dalian Commodity Exchange (DCE) received permission from the China Securities Regulatory Commission (CSRC) to launch iron ore options, according to a statement by the CSRC on its official website on Friday. 

On the same day, the CSRC also permitted trading of methyl alcohol and rapeseed meal options on the Zhengzhou Commodity Exchange, and trading of gold options on the Shanghai Futures Exchange. 

This means that China might have a chance to challenge some of the traditional options trading markets such as Singapore, where the bulk of global iron ore options are traded. The policy also gives enterprises access to more risk-hedging tools in their commodity trading. 

“Most of China’s iron ore options were traded over the counter in the past. But because of extreme volatility in iron ore prices this year, enterprises need officially launched derivatives apart from the traditional futures contracts as risk-hedging methods,” Liu Wensheng, deputy director of the ferrous metal department at First Futures, told the Global Times on Monday…Full Story

Chinese mills say ‘pass’ to more iron ore

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By Victoria Zhou | MySteel

Chinese trading of imported iron ore cooled down over the past week, in marked contrast to the frenzy of business over the previous week in response to the emergency production curbs on steelmakers across much of northern China. The ebbing of activity further undermined imported iron ore prices. Over March 4-8, the daily trading volume of imported iron ore inventories at major Chinese ports reversed down by 211,000 tonnes/day on week to 817,000 t/d on average. At the same time, the daily trading volume of seaborne cargoes plummeted by more than half, dropping by 167,000 t/d on week to 155,000 t/d on average.

Last Friday, Mysteel’s price index for 62% Australian fines seaborne cargoes lost more ground, dipping by $1.25/dmt on week to $85.4/dmt CFR Qingdao. In parallel, Mysteel’s port inventories price index for the 62% Australian fines, easing by Yuan 11/wmt ($1.6/wmt) on week Yuan 628/wmt FOT Qingdao and including 16% VAT.

“In Tangshan and Wu’an (in North China’s Hebei province), the emergency curbs on steel mills’ sintering operations hardened over the past week due to poor air quality,” a Shanghai-based market watcher recalled. “This largely dampened these mills’ iron ore buying interest, especially for port inventories.”

Over March 1-7, the daily discharge rate at Caofeidian and Jingtang – two ports under the jurisdiction of Tangshan city – reversed down by 85,000 t/d on week to 515,000 t/d, a low level only experienced recently during Chinese New Year over February 4-8, according to Mysteel’s latest data released on March 8…Full Story