STEEL NEWS

Iron ore in China continues to set price records

According to Reuters, iron ore futures in China jumped to a new all-time high on Wednesday, May 22, helped by a steady optimistic forecast as steel mills look for sources of raw materials after depletion of supplies. 
The best-selling iron ore futures on the Dalian Mercantile Exchange rose 4.1% to 733 yuan ($ 106.08) per tonne, the highest since launching contracts in 2013. It grew by 3.4% to 728 yuan per ton. 
Steel mills operated at low inventory levels and bought the necessary tonnage only because of high raw material prices.
According to market estimates, the average iron ore reserves in plants are reduced to about 20 days of use compared to the usual levels of reserves of 30 days. According to two purchasing managers at the Hebei steel mills, ore reserves at some private plants in Hebei's leading steel province were reduced to just 10 days. 
“With high profitability, the plants will still have to purchase expensive raw materials to maintain full load,” said a Hebei trader. 
Meanwhile, investors are also worried about further interruptions in shipments from Brazil, China's second largest source of iron ore, after its largest mining company, Vale SA, warned of the risk of rupture of another tailing pond and suspended a rail freight line.
Iron ore shipments from Brazil fell 416,000 tons in the week ended May 19, a week earlier, while shipments from Australia added 1.69 million tons, according to data tracked by Mysteel. 
Base rebar prices rose 1.7% to 3,910 yuan per ton, while the hot-rolled coil gained 1.7% to 3,757 yuan. 
The Dalian coke contract grew 5.3% to a 9-month high of 2338 yuan per ton, which is confirmed by solid physical prices and expectations of tighter environmental measures in Shanxi, the main coke production region.