Iron Ore Market in Brief: with the uncertainty of restriction plans in Tangshan and upcoming tariffs, prices decrease
Physical iron ore prices slightly retreat on August 29th while marketers are waiting for confirmation of production restrictions in China.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE FINES INDEX | USD 81.47 per ton CFR Qingdao | -0.98 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 81.85 per ton CFR Qingdao | -0.98 USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 80.20 per ton CFR Qingdao | -0.96 USD |
MB 58% FE PREMIUM INDEX | USD 70.29 per ton CFR Qingdao | -0.79 USD |
MB 65% FE IRON ORE INDEX | USD 89.90 per ton CFR Qingdao | -1.10 USD |
MB 62% FE CHINA PORT PRICE INDEX | 698 Yuan per wet metric ton | +4 Yuan |
KEY DRIVERS
The iron ore market is greatly influenced by uncertainty of production restrictions to be imposed over September-October on steelmakers in the hub of Tangshan, prompting market participants
to retreat to the sidelines.
An earlier “suggestion draft” for emission control measures in September in China’s Tangshan steelmaking hub was circulated on Monday, while another “preliminary draft” was also released by local authorities on Tuesday with some slight adjustments.
However, most market participants believed it would be best to wait for the official confirmation as changes could still happen. Meanwhile, some traders are also sitting on the sidelines amid the impending rollout of a 15% tariff on USD300 billion of Chinese goods from Sunday September 1st .
China’s steel and iron ore futures prices gained slightly in trading on Wednesday night but dipped at the start of the Thursday morning trading session.
There was a slight uptick just before the midday close on Thursday, but the upward move did not last long and the market continued on a downtrend until the market closed.
Despite the downward trend in futures, spot iron ore trading at Chinese ports continued to be active in the afternoon, whereas prices were rangebound comparing to the previous day.
There was limited activity on the seaborne market with only two deals being concluded by a miner for offloading Pilbara Blend fines cargoes. The foresaid deals were closed at the premium of USD 3.10 per MT and USD3.20 per MT to October index, however the participants were expecting the trade-able premium to be around USD2.50 per MT to September index.
QUOTE OF THE DAY
“The announcement of new tariffs in the ongoing US and China trade talks is anticipated to be released on September 1, so most market participants are likely taking a more cautious approach,” a futures analyst said.
PORT PRICES
Pilbara Blend fines were traded at around 707-712 Yuan per MT in Tangshan city on Thursday, equivalent to USD91.90-92.60 per MT CFR China in the seaborne market.
DALIAN COMMODITY EXCHANGE
The most-traded January iron ore futures contract closed at 580 Yuan per MT on Thursday, down by 8 Yuan per MT from Wednesday’s closing price.
Report By: Mehrdad Najafi
