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Steel price weakened

Steel price weakened
The recent steel price weakness, particularly the Chinese domestic HRC, has taken its toll on the upstream raw material prices.

The recent steel price weakness, particularly the Chinese domestic HRC, has taken its toll on the upstream raw material prices.

The recent steel price weakness, particularly the Chinese domestic HRC, has taken its toll on the upstream raw material prices, traders said Monday. The Platts benchmark price of 62% Fe-content seaborne iron ore fines edged down $1/dmt to $76.50/dmt CFR North China Friday, as traders responded to the slump in steel prices by reigning in ore purchases. Other sources suggested that buyers were deliberately holding back to influence the spot price ahead of annual contract negotiations.

Price negotiation in India on 63.5/63% materials was heard below $81-83/dmt CFR North China, but no deals were heard concluded. In fact, traders were hesitant in taking new positions. Some were even worried about getting out of existing positions. Not surprisingly, traders reported Chinese port-selling prices for 63.5/63% Fe fines $83-85/dmt CFR North China, down from $86/dmt in early February. Having said that, $86/dmt CFR North China was still being offered Monday for this grade, adding mist to an already capricious iron ore market. Some traders said it normally took a while for miners to adjust prices. "Miners are keen to support sentiment as long as possible," one said.

Few transactions were reported Monday. A source reported selling a Panamax cargo of 65% Fe materials at $75.5/dmt FOB India. Some trades could not be concluded apparently because the differences between bid and offer. A 61% cargo offered in India had a bid price at $74/dmt CFR North China but a much higher offer price of $78/dmt. Similarly for 63/62 Fe, one trader said it should be sold at $80/dmt CFR North China to meet buying interests.

Traders reported muted demand from Chinese customers - making traders very cautious, and especially those with large positions following the recent buying spree. A broker in London told Platts that he observed that "derivatives are coming off and there is more sell side at present levels than buy side." Also, traders expect iron ore market volatility to increase. One said "the market is obviously on the downtrend ... It might even drop 7-8 dollars this week".

"A wider trading range is to be seen", another forecast.

The freight market echoed a softer iron ore market and continued to drop Monday, sources said. Handies from East India to China were unchanged since last Friday at $11-12/wmt, but one trader said, it was easy to knock off a dollar from this level after some negotiation. Freight rates on Panamax vessels from India to China dropped to $8/wmt, from $9-10/wmt previously.

Meanwhile, capesized vessels can be booked at $24/wmt from Brazil to China, a notch lower than $27-28/wmt, its recent peak. Iron ore port congestion in East India worsened to 30 days' waiting time for manual loading at Haldia.

Previously reported delay for manual loading at Haldia port was 20-25 days, a source said.

www.TurkishMaritime.com.tr

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