High grade scrap iron Local Suppliers

The iron ore market is recovering after nearly a year of supply and demand cuts caused by Covid-19. A new normal is starting to emerge. Governments are implementing green recovery plans, and prices for coke and metallurgical coal are still high – two factors driving demand for higher grades. Will these factors widen the gap between price predictions for different classes? We asked senior analyst Miriam Falk to explain why high-grade iron could outperform other grades in 2021. For more information on High grade scrap iron visit our site.

Reasons for popularity of High grade scrap iron

We predict that the higher quality segment may outperform the lower and middle classes in 2021. China’s high industrial production rate saw pollution levels starting to rise in major cities. We have seen sintering restrictions increase to control air quality as winter progresses, and we do not expect the restrictions to be lifted before the end of the two sessions held by the Chinese government this month. As discussed earlier, the seasonality effect means pellet and pellet premiums can often see improvements in the first quarter.

Similarly, the market for pelletizing concentrates tends to tighten in the winter, as cold weather suppresses domestic mining activities.

Therefore, it is preferable to use higher quality iron ore raw materials for mills when coking coal prices are high. At present, there is little evidence that the China-Australia tensions responsible for the import ban will be resolved in the near term, thus suggesting that rising coke costs in China will continue for a while. Finally, the main indicator of price expectations regarding quality is the difference in forward-looking curves for the 65% and 62% Fe grades. At the time of writing in January 2021, the buyback on the SGX 65% Fe futures contract was slightly more shallow than the SGX 62% Fe contract.

In other words, the 65-62% Fe forward differential is steady, indicating that the market spreads expect to grow in the coming months, perhaps in response to higher productivity and less polluting raw material demand, or in anticipation of potential high-grade supply during the rainy season of Northern Brazil. For those who want to better understand the short-term market dynamics with respect to the rating, this forward curve structure in 65-62% Fe SGX contracts has become useful It is also one of the few areas in the iron ore futures arena where a dynamic contango can often be seen, providing an angle of interest for traders when compared to the almost continuous backwardness indirect contracts. For more information about scrap iron prices, visit our site.

Local Suppliers of High grade scrap iron

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