There was a marked slowdown in buying interest of iron ore as the Chinese National Day holidays draw nearer, and most end-users would have already restocked sufficiently earlier for that period. Trading activity was also winding down Thursday.

 

Platts assessed the 62% Fe Iron Ore Index unchanged on the day at $132/dry mt CFR North China.

 

A Hunan-based steelmaker said most end-users were adequately stocked up on iron ore and this was an ideal time for them to retreat to await clearer direction from the iron ore and steel markets. "We have sufficient iron ore as our inventory level stands at about 1.5 months' worth of material. We did most of our procurement earlier this month for the holiday period," the steelmaker said.

 

"It's only a few days before October 1 when the holiday starts so it's really hard to find mills that truly need to replenish on spot cargoes now," a Singapore-based trader said. "But we can't ignore the possibility that there might have been some minor mills that hesitated to buy earlier when spot prices were declining in early September, and as a result, need to buy some material urgently now. But in general, any buying will be extremely small-scale."

 

A Zhejiang-based trader said the actual buying situation was "complex" as recent high trade levels were all recorded for cargoes purchased by traders, in anticipation of mill demand for iron ore picking up in mid-October after the holiday period.

 

"End-user demand right now is really weak, but because we have some traders taking positions, sellers are not backing down from high offer levels," the trader said. "However, this really isn't a true reflection of current market fundamentals, especially since the steel performance remains so weak."

 

Steel rebar futures edged lower Thursday, with the most actively traded January contract in Shanghai last trading at Yuan 3,613/mt ($587.75/mt), down Yuan 13/mt from Wednesday, and settling at Yuan 3,616/mt, down Yuan 9/mt on the day.

 

The spot physical square billet price in Tangshan was rangebound Thursday at Yuan 3,010/mt ($489.50/mt) ex-stock Tangshan, according to a mill source in the region.

 

A Shanghai-based trader said he had received some buying inquiries from traders and a handful of steel mills this week, but end-users were all seeking floating price cargoes for October-delivery. "The outlook for the iron ore market is not positive in October, especially with the way steel margins have been going, so with this amount of uncertainty around, mills prefer floating price ore in order to reduce risk."