Iron Ore Market in Brief: Prices plunge amid further China-US trade tensions
More disruptions to trade relations between the United States and China have added to the gloom in the commodities markets on Friday August 2, including iron ore.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE FINES INDEX | USD 107.73 per ton CFR Qingdao | -7.95 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 106.23 per ton CFR Qingdao | -7.95 USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 108.16 per ton CFR Qingdao | -7.72 USD |
MB 58% FE PREMIUM INDEX | USD 105.00 per ton CFR Qingdao | -1.53 USD |
MB 65% FE IRON ORE INDEX | USD 118.20 per ton CFR Qingdao | -5.30 USD |
MB 62% FE CHINA PORT PRICE INDEX | 866 Yuan per wet metric ton | -17 Yuan |
KEY DRIVERS
US President Donald Trump said late on August 1 that he intended to impose another 10% tariff on USD300 billion-worth of Chinese goods from September 1. China’s stock and ferrous futures markets all opened at deep lows in Friday morning trading. The benchmark January iron ore contract recovered moderately in the morning but retreated again in the afternoon to end 4.2% lower than the preceding day’s settlement level.
Iron ore derivatives on the Singapore Exchange also tumbled during the day, with August and September 62% Fe contracts going down by as much as USD7 per ton from Thursday’s close in the afternoon. Physical iron ore trading remained inactive during the day, with buyers taking even more caution than they did earlier this week. Transaction prices at Chinese ports in the morning were about 10 Yuan (USD1.44) per ton lower than a day earlier, and fell further in the afternoon.
The port market has begun to see supply outpace demand recently, sources said. Iron ore stockpiles at 45 major Chinese ports totaled 118.69 million tons on Friday, up by 2.27 million tons from a week earlier, and 4.55 million tons higher than a low of 114.14 million tons on July 12, according to a local data provider.
Seaborne shipments of Brazilian Blend fines and Pilbara Blend fines linked to the September average of 62% Fe indices traded at relatively stable premiums during the day.
QUOTE OF THE DAY
“Prices today dropped massively, probably due to the tensions in the continuing trade war between the US and China, as well as the depreciating Yuan, which has in turn caused the futures market to correct itself,” a trader said.
PORT PRICES
Pilbara Blend fines were traded around 850-880 Yuan per ton in Shandong province and Tangshan city during the day, compared with 865-895 Yuan per ton a day earlier. The latest price range was equivalent to about USD115.60-119.90 per ton CFR China in the seaborne market.
Report By: Mehrdad Najafi
