China’s iron ore market is likely to see supply and demand both weaken this month, according to Mysteel’s latest monthly report released on February 1, suggesting that iron ore prices may continue to fluctuate but will lack support to move up substantially.

Regarding iron ore supply, total shipment volumes arriving at Chinese ports this month will see a slight reduction compared to January’s result, the report predicted, given that wet season weather is impacting both Australia and Brazil, with those countries’ iron ore deliveries being affected by the seasonal factors.
Meanwhile, domestic iron ore concentrates supply is also expected to dip this month compared to the volume in January as some domestic iron ore miners are conducting maintenance or have suspended production temporarily for the Chinese New Year (CNY) holiday (over February 11-17).

At the same time, domestic ore demand is seen softening this month, as molten iron output is likely to decline – albeit by just a limited extent, the report noted.

The prediction assumes that many steel mills’ production will continue to be undermined by the squeezed margins the mills are getting for their finished steel, at least ahead of the CNY holiday.