Iron Ore Market in Brief: Price decrease continue amid limited buying interest
Seaborne iron ore prices continued to fall on Wednesday August 7 amid very limited buying interest among steel mills.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE FINES INDEX | USD 93.31 per ton CFR Qingdao | -4.24 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 91.81 per ton CFR Qingdao | -4.24 USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 93.95 per ton CFR Qingdao | -4.37 USD |
MB 58% FE PREMIUM INDEX | USD 83.00 per ton CFR Qingdao | -3.84 USD |
MB 65% FE IRON ORE INDEX | USD 100.40 per ton CFR Qingdao | -6.30 USD |
MB 62% FE CHINA PORT PRICE INDEX | 782 Yuan per wet metric ton | -21 Yuan |
KEY DRIVERS
According to market sources, steelmakers in China are still unwilling to submit bids for seaborne iron ore. A mill source mentioned that only a few mills were relying on contract cargoes for their day-to-day operations and had no need to make purchase from the spot market.
The most-traded January iron ore futures contract on the Dalian Commodity Exchange continued to decline during the day. It closed 4.8% lower than the preceding day’s closing price. The drop was attributed to a sell-off by traders, adding to the pessimism in the market.
It is also believed that the depreciation of the Chinese Yuan against the United States dollar was a major driver of the decline in China’s futures market, among some active marketers. The bearish sentiment was also felt at Chinese ports, where transaction prices mirrored the downtrend in the seaborne market. There was little activity in the seaborne market, with a Cape size cargo of Pilbara Blend fines offered at the September average of an index at a premium of USD4 per ton finding no takers on trading platform Global Ore.
A similar-sized shipment offered at a premium of USD3.70 per ton against an index in the secondary market also failed to generate any interest, according to a trader. Iron ore indices fell across the board for a fourth day.
QUOTE OF THE DAY
“Mills will likely continue to hold out [from buying] if prices continue to fall. There is no rush to buy medium- and high-grade iron ore while margins are still being squeezed,” a Chinese mill source said.
PORT PRICES
Pilbara Blend fines were traded around 755-798 Yuan per ton in Shandong province and Tangshan city during the day, compared with 785-820 Yuan per ton a day earlier. The latest price range is equivalent to about USD100.30-106.20 per ton CFR China in the seaborne market.
Report By: Parya AhmadPour
