Iron Ore Market in Brief: Steady seaborne prices, firm interest in Fe 65% derivatives
Seaborne iron ore prices were steady on Friday June 28, with only minimal price moves compared with Thursday’s activity, but interest in the Singapore Exchange’s (SGX) 65% Fe iron ore derivative contract remained strong. By 6:30pm Singapore time, 205,000 MT had been traded and cleared on the contract, according to SGX data. This compares with 143,000 MT traded the previous day.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE INDEX | USD 118.47 per ton CFR Qingdao | +0.45 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 116.51 per ton CFR Qingdao | +0.45 USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 119.64 per ton CFR Qingdao | +0.67 USD |
MB 58% FE PREMIUM INDEX | USD 109.11 per ton CFR Qingdao | +1.03 USD |
MB 65% FE IRON ORE INDEX | USD 128.10 per ton CFR Qingdao | +0.60 USD |
MB 62% FE CHINA PORT PRICE INDEX | 864 Yuan per wet metric ton | +4 Yuan |
KEY DRIVERS
Trading activity was limited in the physical market on Friday, with bids and offers largely holding steady. Buying interest on the trading platforms was mostly confined to medium grade iron ore fines, with bids made at premiums of around USD5.10-5.20 per MT CFR China for the Pilbara Blend fines – almost similar levels to the previous day - although no trades were concluded, according to market participants.
A cargo of Newman lump was traded on the platform at the July average of a 62% Fe index, adjusted for Fe content, plus a lump premium of $0.40 per DMTU on an fob basis. The previous trade occurred on June 20 at the July average of a 62% Fe index, adjusted for Fe content, plus a lump premium of $0.3675 per dmtu on an fob basis.
Market participants said they were curious about the higher price achieved for the lump cargo. Some traders suggested that the maintenance announced by BHP for early July could be a partial reason for the higher price. Port-side trading activity in China was also limited on Friday, with prices for Pilbara Blend fines trading at a slightly higher price, sources said.
This could also suggest that demand for medium-grade iron ore fines is still healthy, with supply tightness a driving force behind the rising prices, according to other market participants. Fastmarkets’ daily MB 62% Fe Iron Ore Index rose by $0.45 per tonne, while the daily MB 65% Fe Iron Ore Index increased $0.60 per tonne.
QUOTE OF THE DAY
“Port prices were still seen on an uptrend in China, but activity seems limited overall, [although] this could also be due to tighter inventories at the ports,” a China-based trader said.
Report By: Shahriyar Yusefi
