Iron Ore Market in Brief: Pressure on seaborne lump premiums with availability of cheaper port cargoes
Seaborne iron ore lump premiums fell on Tuesday July 16, because cheaper alternatives were available at Chinese ports, market participants told.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE FINES INDEX | USD 122.15 per ton CFR Qingdao | +0.74 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 122.07 per ton CFR Qingdao | +0.74 USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 123.85 per ton CFR Qingdao | +0.68 USD |
MB 58% FE PREMIUM INDEX | USD 112.01 per ton CFR Qingdao | -0.36 USD |
MB 65% FE IRON ORE INDEX | USD 129.30 per ton CFR Qingdao | +0.80 USD |
MB 62% FE CHINA PORT PRICE INDEX | 910 Yuan per wet metric ton | +15 Yuan |
KEY DRIVERS
The premium for seaborne iron ore lump took a huge dip as cheaper port availability added to the downward pressure, traders said. “Cheaper port [availability has] been a major roadblock for seaborne iron ore lump imports,” according to one trade source. On one trading platform, a cargo of 62.5% Fe Newman lump was initially offered at a premium of USD0.3600 per dry metric ton unit on an fob basis, and trended down to USD0.2950 per DMTU.
A bid was made at USD0.1700 per DMTU on an FOB basis, but no deal was concluded at the close of the trading window. Meanwhile, prices for seaborne iron ore fines were largely range-bound because most market participants appearing to adopt a wait-and-see approach.
Index for iron ore 62% Fe fines rose by USD0.74 per ton, while the daily index for iron ore 65% Fe Brazil-origin fines increased by USD0.80 per ton.
QUOTE OF THE DAY
“[The] premium for the seaborne [iron ore] lump was too high,” a Singapore-based trader told. “Imported cargoes [need] to trade at [a premium] below USD0.30 to compete with the cheaper Chinese port stocks that are already available.”
PORT PRICES
Pilbara Blend fines traded at 900-925 Yuan per ton in Shandong province and Tangshan city during the day, compared with 888-895 Yuan per ton a day earlier. The latest price range was equivalent to USD123-126.50 per ton CFR China in the seaborne market.
Report By: Naeemeh Ferdowsi
