Iron Ore Market in Brief: tight supply supports seaborne prices AND positive economic data
A resume in upward trajectory of Seaborne iron ore prices on Monday July 15, amid fears of supply tightness accompanied by a positive outlook on China’s overall economy.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE FINES INDEX | USD 121.41 per ton CFR Qingdao | +2.12 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 121.33 per ton CFR Qingdao | +2.12 USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 123.17 per ton CFR Qingdao | +1.79 USD |
MB 58% FE PREMIUM INDEX | USD 112.37 per ton CFR Qingdao | -2.53 USD |
MB 65% FE IRON ORE INDEX | USD 128.50 per ton CFR Qingdao | +0.80 USD |
MB 62% FE CHINA PORT PRICE INDEX | 895 Yuan per wet metric ton | +4 Yuan |
KEY DRIVERS
Market participants said that data released by the Chinese authorities has given a boost to the iron ore market. China’s crude steel output was up by 10% year-on-year in June, to 87.53 million MTs, and was up 9.9% year on year to 492.17 million MTs in January-June this year, according to the Chinese National Bureau of Statistics.
In addition, China’s GDP grew by 6.3% in the first half of 2019, the bureau added. As a result, futures on the DCE and SGX saw gains for their iron ore contracts. As of 7pm Singapore time, the August 62% derivative contract on the SGX was at USD116.60 per MT, up USD3.70 per MT from its opening of USD112.90 per MT. The most-traded iron ore September contract on the DCE, closed its afternoon session at 895 Yuan per MT (equivalent to USD130.05 per MT), up by 22 Yuan per MT from Friday’s afternoon closing price of 873 Yuan per MT.
The most-traded October hot-rolled coil and rebar contracts on the DCE also saw gains at the afternoon close of the trading session. Meanwhile, some traders added that supply tightness remained in the iron ore market and was likely to continue lending support to seaborne prices. There was a bid on a trading platform for Pilbara Blend fines at USD121.75 per MT, for prompt loading at the end of July, while a bid for an August-loading cargo was seen at USD119 per MT, but no deals were concluded.
Australian miner BHP is adjusting the typical specifications of its iron ore products for its financial year starting July 2019, according to sources. It is keeping the Fe content at 62.4% for Newman fines and increasing Yandi fines from 57% to 57.1%, while reducing Newman lump from 63% to 62.8% and cutting the iron content of Mining Area C fines from 61% to 60.8%.
For Jimblebar fines, typical iron content was expected to fall to 60.3% from July, down from 61% in the financial year ending June 30, but will now drop to 59.5%, the miner said. Index for iron ore 62% Fe fines rose by USD2.12 per MT on July 15, while the daily index for iron ore 65% Fe Brazil-origin fines increased USD0.80 per MT.
QUOTE OF THE DAY
“[The] positive reaction towards the earlier release of data from Chinese authority [means there were] plenty of buyers in the futures markets today,” a broker source said.
PORT PRICES
Pilbara Blend fines traded at 888-895 Yuan per MT in Shandong province and Tangshan city during the day, compared with 880-905 Yuan per MT last Friday. The latest price range was equivalent to USD121.30-122.30 per MT CFR China in the seaborne market..
Report By: Encieh Arbabi
