This has resulted in a mixed long-term outlook for high-grade fines, market sources told Fastmarkets.
As hints of the central Chinese government’s intention
of keeping this year’s output from exceeding last year’s began to emerge in July, expectations of a drop in demand for iron ore grew, which dragged down prices for the steelmaking product, particularly high-grade fines, sources said.
The bearish outlook for iron ore demand in the second half of 2021 triggered a rapid downtrend in prices, resulting in an increase in volatility, a trading source in Shanghai told Fastmarkets.
“From July, the weakening demand dominated the fundamentals for iron ore and prices started to fall. But compared with mid-grade fines, high-grade fines generated less buying interest because steel mills in China have no need to maximize steel output,” he said.
As a result, prices for high grades dropped faster than mid-grade fines,...