Iron Ore Market in Brief: Seaborne prices fall on uncertain outlook
Seaborne iron ore prices fell on Wednesday July 31, on an uncertain outlook for the markets.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE FINES INDEX | USD 117.15 per ton CFR Qingdao | -2.46 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 115.65 per ton CFR Qingdao | -3.88 USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 118.34 per ton CFR Qingdao | -2.55 USD |
MB 58% FE PREMIUM INDEX | USD 107.84 per ton CFR Qingdao | +1.37 USD |
MB 65% FE IRON ORE INDEX | USD 126.40 per ton CFR Qingdao | -1.60 USD |
MB 62% FE CHINA PORT PRICE INDEX | 893 Yuan per wet metric ton | +3 Yuan |
KEY DRIVERS
Market participants believed that the uncertain outlook for steel consumption has added downward pressure on the prices for iron ore. Despite the earlier draft notice circulated to traders and market
participants, about the likelihood of the environmental curbs on steelmakers in Tangshan over August being relaxed, no official statement has been made.
A steel mill source told that although the production curbs seem to be relaxed in August compared with July, most mills were in no hurry to plunge into an all-out buying spree for raw materials. In addition, some mills have adopted a wait-and-see stance and were monitoring the situation and awaiting any official announcement from the authorities.
Furthermore, a recent release of China’s purchasing managers index (PMI), by the China Steel Logistics Professionals Committee, suggested that the steel sector had contracted over July, further adding to the bearish sentiment. In turn, Chinese iron ore futures rose in the morning trading session but the market took a sharp drop after the mid-day break, and seemed to have trended down toward the afternoon close.
A broker based in Singapore told that the market was earlier bullish amid the likely announcement of relaxed curbs on production, but nothing was official yet, so the futures market had reacted accordingly and corrected itself due to the uncertainty.
The source also added that trade talks between the United States and China, held on Wednesday in Shanghai, were rumored to have been tense, and that negotiations had probably yielded only limited results, adding to the drag on the futures market. Index for iron ore 62% Fe fines fell by USD2.46 per ton, while the daily index for iron ore 65% Fe Brazil-origin fines decreased by USD1.60 per ton.
QUOTE OF THE DAY
“In the morning session for the Chinese iron ore futures, participants were still focused on the draft paper about looser restrictions, but there was no official word to confirm this, so the market reacted
accordingly and adjusted downward,” a broker said.
PORT PRICES
Pilbara Blend fines traded around 885-902 Yuan per ton in Shandong province and Tangshan city during the day, compared with 881-900 Yuan per ton a day earlier. The latest price range was equivalent to USD120.80-123.20 per ton CFR China in the seaborne market..
Report By: Shahriyar Yusefi
