Iron Ore Market in Brief: Recovery in Trading keeps prices from falling more
Seaborne iron ore market stopped its downward trend on Thursday August 8, with the return of some buying interest keeping prices from falling for a seventh consecutive trading day.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE FINES INDEX | USD 94.12 per ton CFR Qingdao | +0.81 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 92.62 per ton CFR Qingdao | +0.81USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 94.78 per ton CFR Qingdao | +0.83 USD |
MB 58% FE PREMIUM INDEX | USD 84.11 per ton CFR Qingdao | +1.11 USD |
MB 65% FE IRON ORE INDEX | USD 101.60 per ton CFR Qingdao | +1.20 USD |
MB 62% FE CHINA PORT PRICE INDEX | 773 Yuan per wet metric ton | -9 Yuan |
KEY DRIVERS
With cargoes changing hands against indices, trading activity picked up during the day. Jimblebar fines changed hands at the October average of two indices at a discount of USD2.70 per ton, a difference of just USD0.10 per ton compared with the last transaction involving the product on Tuesday, which was concluded at a discount of USD2.60 per ton against two indices.
An index-linked cargo of Brazilian Blend fines fetched a premium of USD2.20 per ton during the day, which is USD1.40 per ton lower compared with the last known trade concluded at a premium of USD3.60 per ton last Friday. Pilbara Blend fines also fetched a lower premium of USD3.01 per ton, which compares with the last transaction concluded on Tuesday at a premium of USD3.72 per ton.
Iron ore futures in China also saw a return of buying interest, according to brokers. The benchmark January contract on the Dalian Commodity Exchange trended upward in the first half of the day, which was attributed to buyers capitalizing on relatively lower prices, but trading activity dropped in the afternoon, resulting in it closing at the same price as a day earlier.
A broker attributed the return of buying interest to traders likely getting accustomed to the depreciated Chinese Yuan in comparison with the United States dollar. The broker cautioned that the worst might not be over yet for iron ore futures, with steelmakers still absent from the market. China imported 91.02 million tons of iron ore in July, up 1.2% from 89.96 million tons a year earlier and 21.1% higher than June’s 75.18 million tons, according to the latest Chinese customs data.
The country imported 590.08 million tons of the steelmaking raw material in the first seven months of 2019, down 4.9% from 620.49 million tons a year earlier. A trader in China believes that Chinese steelmakers were still adopting a wait-and-see approach toward the market, and were likely waiting for seaborne prices to stabilize before returning to the market to buy again.
QUOTE OF THE DAY
“Prices may be up for now with the return of some buying activity, but I would still exercise caution because there is still no firm reason for heightened demand for iron ore in the Chinese steel market,” a Chinese mill source said.
PORT PRICES
Pilbara Blend fines were traded around 760-785 Yuan per ton in Shandong province and Tangshan city during the day, compared with 755-798 Yuan per ton a day earlier. The latest price range is equivalent to about USD100.70-104.20 per ton CFR China in the seaborne market.
Report By: Shahriar Yusefi
