Iron Ore Market in Brief: After Tuesday downturn, seaborne prices rebound
Iron ore prices rebounded on Wednesday June 26 amid strong activity on trading platforms.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE INDEX | USD 117.63 per ton CFR Qingdao | +3.17 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 115.67 per ton CFR Qingdao | +2.41 USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 117.85 per ton CFR Qingdao | +2.14 USD |
MB 58% FE PREMIUM INDEX | USD 104.52 per ton CFR Qingdao | -0.08 USD |
MB 65% FE IRON ORE INDEX | USD 126.60 per ton CFR Qingdao | +1.70 USD |
MB 62% FE CHINA PORT PRICE INDEX | 841Yuan per wet metric ton | -5 Yuan |
KEY DRIVERS
Prices across iron ore grades moved up despite steel mill production restrictions in parts of China. Some market sources expect downstream prices to improve amid the production restrictions in Tangshan and that in turn should support the prices for high-grade material.
A buyer source said that the iron ore market was at an interesting point because while the overall demand is under pressure, Chinese mills are keen to maximize the quality and output of their blast furnaces in anticipation of rising steel prices amid the steelmaking production restrictions in parts of the country.
“High-grade ore prices may stay supported despite restrictions on steelmakers in China’s production hub of Tangshan [because] blast furnace performance optimization is key factor now,” the source said. Steel mills typically increase their usage of high-grade ores when they chase productivity, while cost consciousness results in less appetite for such materials.
Overall activity in the market was low throughout the first half of the day, with index-linked bids seen at a premium of $4.60-4.90 per ton for Pilbara Blend fines. However, trading activity on one trading platform picked up pace towards the close of the market, with a 61% Fe Pilbara Blend fines cargo exchanging hands at $113.80 per ton CFR China.
In addition, a cargo of 65% Fe Iron Ore Carajas was traded at $126.60 per ton CFR China - the previous known seaborne trade for Brazilian fine was recorded at $121.35 per ton CFR China on May 29. A trader source meanwhile, expressed surprise at the slight improvement in prices on Wednesday because there was no confirmed news regarding fresh supply disruptions during the day and the market had already priced in Rio Tinto’s cut to its annual shipment guidance by around 13 million tons.
Daily MB 62% Fe Iron Ore Index rose by $3.17 per ton, while the daily MB 65% Fe Iron Ore Index dropped $1.70 per ton.
QUOTE OF THE DAY
“The market suddenly made a turnaround close to the end of the day on both the physical and futures fronts, with firmer-than anticipated prices seen. We heard rumors of further shipment cuts from a major miner, but have not [had] confirmation from any miners so far,” a Singapore-based trader said.
Report By: Encieh Arbabi
