Iron Ore Market in Brief: amid looser production in Tangshan, seaborne prices went up
Seaborne iron ore prices pushed up on Wednesday September 4 by confirmation of looser production restrictions for Tangshan steelmakers.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE FINES INDEX | USD 91.32 per ton CFR Qingdao | +2.18 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 91.71 per ton CFR Qingdao | +2.18 USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 89.10 per ton CFR Qingdao | +2.30 USD |
MB 58% FE PREMIUM INDEX | USD 80.42 per ton CFR Qingdao | +4.14 USD |
MB 65% FE IRON ORE INDEX | USD 97.20 per ton CFR Qingdao | +1.00 USD |
MB 62% FE CHINA PORT PRICE INDEX | 750 Yuan per wet metric ton | +11 Yuan |
MARKET DRIVERS
According to market participants, the looser restrictions imposed on steelmakers in North China’s hub of Tangshan for Sep and Oct, has made an increase in buying interest. It was about end of August when a suggestion draft of the pollution emissions control measures was circulated to marketers. This was finally ended with no further amendments.
Some market traders claimed that steel mills were stockpiling iron ore from Chinese ports as stricter production curbs could be issued getting close to the country’s 70th National Day holiday in October. Even one trader has told that due to limited supplies of Australian fines, market bullishness may have been increased.
Moreover, spot iron ore trading activity continued at the Chinese ports with prices up by around 1.5% from Tuesday, being in tandem with the ascending trend seen in the Chinese future market. The benchmark January iron ore futures contract saw a strong surge in the morning trading session on Wednesday, going up by around 1.8% before falling back at the midday break.
However, it did manage to recover again later, with prices rising about 1.3% on the day. “growth in buying interest for the January contract was prompted by the news Tangshan steelmakers.” Said a futures broker. He also added punters were likely banking on short-term support demand.
A cargo of Pilbara Blend fines was offered at a premium USD4.10 per MT to the October index, slightly higher than a last known transaction (done at a premium of USD3.80) but no deal was concluded at the end of the day.
QUOTE OF THE DAY
“Steel margins seem to be improving, which is likely to continue to lend some support to iron ore prices for the short term,” an analyst said.
PORT PRICES
Pilbara Blend fines were traded at around 727-755 Yuan per MT in Tangshan city and Shandong province on Wednesday, compared with 725-750 Yuan per MT a day earlier.
The latest range is equivalent to USD94.40-98.20 per MT CFR China in the seaborne market.
Report By: Naeemeh Ferdowsi
