China's iron ore supply and demand to increase in May

According to Mysteel's latest monthly report, China's iron ore market is expected to increase both supply and demand this month. Ore prices are expected to fluctuate throughout the month.

In May, Mysteel expects to see some increase in imported iron ore supply in the Chinese market as shipments from overseas iron ore mills gradually increased during the month. As a result, iron ore arrivals at Chinese ports are also expected to increase.

In its latest quarterly reports, leading iron ore miners Vale, Rio Tinto and BHP have maintained their annual aggregate guidelines for production and shipments, despite the lower-than-expected performance of all three in the January-March period of this year, while Fortescue Metals Group has raised its iron ore shipments target.

Meanwhile, domestic iron ore production is expected to increase further this month as restrictions on the operations of some miners caused by various pandemic control measures are gradually eased, the report said.

According to Mysteel's research, domestic iron ore concentrate production is thought to have increased to 23 million tons, or 1.5 million tons per month, in April.

On the other hand, Mysteel estimates that iron ore demand from domestic steelmakers is expected to strengthen this month. However, the increase may be limited as steelmakers' pig iron output may also be limited.

Overall, he expects the supply-demand gap in iron ore to narrow further this month as overall inventories at Chinese ports fall further. However, given that the total port stocks are still relatively high, supply and demand will be limited in ore prices.

The latest data from Mysteel showed that imported iron ore stocks at China's 45 major ports dropped to a six-month low of 145.2 million tons as of April 28, or 8.7 million tons as of March 30.

In addition, Mysteel's report shows that iron ore prices may continue to fluctuate in the near future as the market is quite mixed at the moment.

During April, iron ore prices experienced a correction and Mysteel SEADEX 62% Australia decreased from $157.7/dmt on March 31 to $146.2/dmt CFR Qingdao as of April 29.