Iron Ore Market in Brief: Rally extends however pessimism lingers
For a second day the seaborne iron ore prices returned on Friday August 23 amid derivatives gains, but the market confidence has not been totally recovered yet.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE FINES INDEX | USD 87.81 per ton CFR Qingdao | +3.39 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 88.19 per ton CFR Qingdao | +3.39 USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 86.57 per ton CFR Qingdao | +3.44 USD |
MB 58% FE PREMIUM INDEX | USD 75.56 per ton CFR Qingdao | +2.87 USD |
MB 65% FE IRON ORE INDEX | USD 95.50 per ton CFR Qingdao | +3.20 USD |
MB 62% FE CHINA PORT PRICE INDEX | 710 Yuan per wet metric ton | +9 Yuan |
KEY DRIVERS
China’s iron ore futures continued its advance during the day with the benchmark contract of January being finalized 3.6% higher than Thursday level. Also the contracts on iron ore derivatives for September and October on Singapore Exchange bounced up even further to Tuesday levels, over the Wednesday plummet.
Miners in the market actively continued offering seaborne cargoes on platforms or via other channels, firming several deals which were reported to be at slighter stronger premiums. No fixed price buying interest was observed in market.
According to sources, some traders offered similar cargoes at a premium of just USD2.30-2.50 per MT, while a September-index-linked capsize shipment belonging to Pilbara Blend fines was sold by a miner at a premium of 2.80 per MT.
Prices were reported to be more conservative at Chinese ports during the day with similar trading volume reported on the earlier day. Many traders held a pessimistic outlook on iron ore - causing a lack of speculative buying - with only mills restocking prudently from ports, a trader in Shanghai said.
QUOTE OF THE DAY
“For the short term, USD80 per MT looks like a support level for seaborne iron ore prices. But in the longer term, I feel it possible for prices to fall back to USD60-70 per MT,” the Shanghai trader said.
PORT PRICES
Pilbara Blend fines were traded at around 700-718 Yuan per MT in Shandong province and Tangshan city on Friday, compared with 690-707 Yuan per MT a day earlier. The latest price range was equivalent to USD 92.10-94.50 per MT CFR China in the seaborne market.
DALIAN COMMODITY EXCHANGE
The most-traded January iron ore futures contract closed at 613 Yuan per MT on Friday, up by 13 yuan per MT from Thursday’s closing price.
Report By: Encieh Arbabi
