Iron Ore Market in Brief: Seaborne prices plunge amid futures sell off
Seaborne iron ore prices fell on Friday July 5, while futures prices on the Dalian Commodity Exchange plunged for the second consecutive session.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE FINES INDEX | USD 114.81 per ton CFR Qingdao | -7.22 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 114.06 per ton CFR Qingdao | -7.22 USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 117.42 per ton CFR Qingdao | -6.58 USD |
MB 58% FE PREMIUM INDEX | USD 109.89 per ton CFR Qingdao | -6.34 USD |
MB 65% FE IRON ORE INDEX | USD 127.30 per ton CFR Qingdao | -3.50 USD |
MB 62% FE CHINA PORT PRICE INDEX | 878 Yuan per wet metric ton | -17 Yuan |
KEY DRIVERS
Futures on the Dalian Commodity Exchange dropped by a further 4.4% to 829.50 Yuan per ton (equivalent to USD121 per ton) at the close of the afternoon trading session on Friday, down from 868 Yuan per ton on Thursday. The July swaps contract on the Singapore Exchange continued its downward trend, falling from USD120.06 per ton at the opening of the market to USD115.68 per ton at the close, or down by around 3.65%.
Supply was still considered tight in the market and there were no concrete reasons for the prices to plunge drastically, a trader said. Weaker prices on the Dalian Commodity Exchange and the Singapore Exchange were probably a consequence of market participants squaring off their positions, the trade source added.
But at least one mill source felt that the price drop would be temporary because environmental restrictions in the Tangshan area have loosened, so there will still be demand for seaborne iron ore cargoes while inventory at ports remains limited. Index for iron ore 62% Fe fines fell by USD7.22 per ton, while the daily index for iron ore 65% Fe Brazil-origin fines dropped by USD3.50 per ton.
QUOTE OF THE DAY
“On a fundamental level, supply is still tight and the price drop was due to sentiment-driven factors amid and rumors around heightened scrutiny in China by steel mills on the reasons for this year’s price surge,” a trader said.
Report By: Mehrdad Najafi
