Iron Ore Market in Brief: with the market waiting for Tangshan restriction plan, prices are range-bound
While market participants continued to wait for further news on China’s production restriction, physical iron ore prices changed slightly on Wednesday August 28.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE FINES INDEX | USD 82.45 per ton CFR Qingdao | +0.10 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 82.83 per ton CFR Qingdao | +0.10 USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 81.16 per ton CFR Qingdao | +0.09 USD |
MB 58% FE PREMIUM INDEX | USD 71.08 per ton CFR Qingdao | -0.38 USD |
MB 65% FE IRON ORE INDEX | USD 91.00 per ton CFR Qingdao | -0.10 USD |
MB 62% FE CHINA PORT PRICE INDEX | 694 Yuan per wet metric ton | -3 Yuan |
KEY DRIVERS
A “suggestion draft” for emission control measures in September in northern China’s Tangshan steel hub was circulated among market participants on Monday and another “preliminary draft” was heard to be released by local authorities on Tuesday, with slight adjustments made.
Based on Chinese market participants’ expectation, the final version would have limited further versions, despite their thought of it to be safer to wait to decide about buying and selling until after the finalization.
Some blast furnaces have already been ordered to suspend operations since last week in North China’s Wu’an city. Hence till next month there could even be stricter measures imposed according to a local source.
Spot iron ore trading at Chinese ports became more active in the afternoon, in line with futures improvements, as its steel and iron ore extended losses at first in trading on Tuesday night but later started to rebound largely with upward trend on Wednesday.
Having only a few deals concluded for low-alumina materials at big discounts, the seaborne market remained lackluster on the day. The iron ore indices were also rangebound during the day.
QUOTE OF THE DAY
“With growing volumes of 65% Fe Iron Ore Carajas coming from Brazil, the spread between the 65% and 62% grades will probably narrow further, but this will also depend on how the Chinese steel mills’ profit margins perform,” a trader told said.
PORT PRICES
Pilbara Blend fines were traded at around 685-710 Yuan per MT in Shandong province and Tangshan city on Wednesday, compared with 695-710 Yuan per MT a day earlier. The latest range was equivalent to USD89.00-92.40 per MT CFR China in the seaborne market.
DALIAN COMMODITY EXCHANGE
The most-traded January iron ore futures contract closed at 588 Yuan per MT on Wednesday, up by 2 Yuan per MT from Tuesday’s closing price.
Report By: Naeemeh Ferdowsi
