Iron Ore Market in Brief: Seaborne prices retreat after previous day’s rally
Seaborne iron ore prices fell back on Wednesday July 10, after buyers appeared to adopt a wait-and-see stance in response to rising steel product inventories.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE FINES INDEX | USD 120.96 per ton CFR Qingdao | -0.61 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 120.88 per ton CFR Qingdao | -0.61 USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 122.38 per ton CFR Qingdao | -1.12 USD |
MB 58% FE PREMIUM INDEX | USD 109.89 per ton CFR Qingdao | -1.96 USD |
MB 65% FE IRON ORE INDEX | USD 128.40 per ton CFR Qingdao | -0.20 USD |
MB 62% FE CHINA PORT PRICE INDEX | 890 Yuan per wet metric ton | -13 Yuan |
KEY DRIVERS
Seaborne iron ore prices were weaker as market participants highlighted that buyers were probably taking on a more cautious approach towards the earlier price hike. Some mill sources also highlighted the fact that inventories of steel products, including hot-rolled coil, were growing, signaling a weakened appetite.
This in turn, prompted traders to keep their offers for HRC unchanged. At least one Chinese steel mill source pointed out that steel margins have been squeezed and said some mills were “bleeding”. Some trade sources also suggested that buyers were likely to become more selective when it comes to procuring iron ore, with low and medium grades being preferred by most steel mills for the time being.
The selective buying habit was reflected in limited trading at Chinese ports as well, with the price of deals dipping slightly compared with the previous day. Index for iron ore 62% Fe fines fell by USD0.61 per ton, while the daily index for iron ore 65% Fe Brazil-origin fines decreased USD0.20 per ton.
QUOTE OF THE DAY
“Chinese steel mills are [concerned about] tight margins, so buying habits have been focused on medium-grade [iron ore products] as most [mills] felt the high grades were currently too expensive,” a mill source said.
PORT PRICES
Pilbara Blend fines traded at 890-900 Yuan per ton in Shandong province and Tangshan city during the day, compared with 905-910 Yuan per ton a day earlier. The latest price range was equivalent to USD121.50-122.90 per ton CFR China in the seaborne market.
Report By: Shahriyar Yusefi
