Iron Ore Market in Brief: Prices plunge towards USD80 per ton
Seaborne iron ore prices dipped further on Wednesday August 21, falling to a level last seen just after Vale’s tailings dam accident in Brazil late in January.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE FINES INDEX | USD 82.38 per ton CFR Qingdao | -5.56 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 82.76 per ton CFR Qingdao | -5.56 USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 80.57 per ton CFR Qingdao | -7.22 USD |
MB 58% FE PREMIUM INDEX | USD 71.42 per ton CFR Qingdao | -4.86 USD |
MB 65% FE IRON ORE INDEX | USD 91.60 per ton CFR Qingdao | -4.40 USD |
MB 62% FE CHINA PORT PRICE INDEX | 711 Yuan per wet metric ton | -14 Yuan |
KEY DRIVERS
China’s steel and iron ore futures extended their losses on Tuesday night and Wednesday morning, although the steel contracts rebounded in the afternoon and the iron ore contracts stayed range-bound. The benchmark January iron ore contract breached the 600 Yuan-per-ton mark, which is a technical support level, sources said.
While spot supplies of iron ore cargoes have been on the rise, demand is being subdued by talk of further production restrictions in China. Local authorities in north China’s Wu’an city have ordered four local steelmakers to suspend blast furnace production from August 22 until the end of the month, with one furnace exception at each site, sources told.
This is based on some existing restrictions for the area and will involve a total of nine blast furnaces, they added. Spot iron ore trading activity at Chinese ports generally remained flat, with prices down by about USD 2-3 per ton.
Seaborne prices continued to drop more quickly, however, with September and October 62% Fe derivative contracts on the Singapore Exchange trading about USD 6 per ton lower than on Tuesday. Buyers remained unwilling to take seaborne cargoes at fixed prices, while premiums for index-linked shipments continued to weaken, especially for Brazilian fines, in the form of a shift of the quotation period from the arrival month to the next month.
Capesize shipments of Pilbara Blend fines changed hands in the secondary market at the September average of a 62% Fe index at a premium around USD 2.50 per ton, participants said.
QUOTE OF THE DAY
“Although price volatility like today’s could be due to short-term overselling, it is inevitable that iron ore prices should fall, given the supply-demand balance skewing to the left side,” a trader in
Shanghai said.
PORT PRICES
Pilbara Blend fines were traded at around 700-720 Yuan per ton in Shandong province and Tangshan city on Wednesday, compared with 720-730 Yuan per ton a day earlier. The latest price range was equivalent to USD 92.30-95.10 per ton CFR China in the seaborne market.
Report By: Parya AhmadPour
