Iron Ore Market in Brief: Recovery of prices towards USD 85 after the big fall
Seaborne iron ore prices experienced a new bounce-up on Thursday August 22 passing a major dip to the lowest in last seven months.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE FINES INDEX | USD 84.42 per ton CFR Qingdao | +2.04 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 84.80 per ton CFR Qingdao | +2.04 USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 83.13 per ton CFR Qingdao | +2.56 USD |
MB 58% FE PREMIUM INDEX | USD 72.69 per ton CFR Qingdao | +1.27 USD |
MB 65% FE IRON ORE INDEX | USD 92.30 per ton CFR Qingdao | +0.70 USD |
MB 62% FE CHINA PORT PRICE INDEX | 701 Yuan per wet metric ton | -10 Yuan |
KEY DRIVERS
China’s steel and iron ore futures marketers observed a limited change both on Wednesday night and Thursday morning. However it recovered on Thursday afternoon after industry data was released implying continuous large decline in domestic steel production and inventories.
The benchmark iron ore contract for January was closed exactly at 600 Yuan per ton. This is believed to be as a technical support for price levels by market participants. Following that, the rebound was further extended on Singapore Exchange with its iron ore derivatives, 62% Fe September and October contracts rising almost USD 4 per ton from its previous day.
According to sources, the SGX 65% Fe derivatives posted over 10 trades with a total tonnage of 150,000 MT at 6.15 Singapore time with the September 65%/62% Fe spread close to $9 per ton, in comparison with its earlier this week of app. USD 11 per ton.
with index-related transactions occurring at relatively stable premium or discount levels, the seaborne iron ore trading became more dynamic on Thursday.
Despite the limited recovery, depression still exist among the market participants. However, the capsize cargoes of Pilbara Blend fines are heard to be available in the secondary market in September at an average of a 62% Fe index premium USD 2.30 per ton, which is down with respect to the lowest premium heard on previous day at USD2.40 per ton.
As large trading volumes were being reported at Chinese ports, transaction prices were weakened over the day. However, prices are still much higher than they are in the seaborne market.
QUOTE OF THE DAY
“While Chinese mills are mostly only buying on an as-needed basis from ports, seaborne iron ore liquidity remains poor, especially for lumps and pellets,” a trader in east China said.
PORT PRICES
Pilbara Blend fines were traded at around 690-707 Yuan per ton in Shandong province and Tangshan city on Thursday, compared with 700-720 Yuan per ton a day earlier. The latest price range was equivalent to $90.90-93.25 per ton CFR China in the seaborne market.
DALIAN COMMODITY EXCHANGE
The most-traded January iron ore futures contract closed at 600 yuan per ton on Thursday, up by 10.50 Yuan per ton from Wednesday’s closing price.
Report By: Shahriyar Yusefi
