Iron Ore Market in Brief: Flat prices welcoming Chinese Holiday
Seaborne iron ore prices were flat on Friday September 13 due to a muted market and Chinese public holiday.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE FINES INDEX | USD 99.30 per ton CFR Qingdao | unchanged |
MB 62% FE PILBARA BLEND FINES INDEX | USD 99.69 per ton CFR Qingdao | unchanged |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 97.60 per ton CFR Qingdao | unchanged |
MB 58% FE PREMIUM INDEX | USD 86.57 per ton CFR Qingdao | unchanged |
MB 65% FE IRON ORE INDEX | USD 105.60 per ton CFR Qingdao | unchanged |
MB 62% FE CHINA PORT PRICE INDEX | 768 Yuan per wet metric ton | unchanged |
MARKET DRIVERS
With the mid-Autumn festival on Friday, markets in china were closed and prices remained unchanged till Monday September 16th. Hence, the lack of visible market activity led to the daily iron ore indices being rolled over in accordance with published fallback measures.
Brazil’s Vale said a mining front at its Brucutu mine in Minas Gerais was suspended on Thursday by the country’s National Mining Agency. The front was said to have exceeded the approved mineral reserve limit.
Vale reassured its customers that the previously announced 2019 sales guidance of 307-332 million MT of iron ore and pellets had not been affected.
PORT PRICES
No visible activity.
CIS PIG IRON: Still silent market on weak fundamentals
The export market for pig iron from the Commonwealth of Independent States (CIS) was silent this week due to suppliers and buyers holding back because of weak fundamentals, sources told. Weekly price assessment for high-manganese pig iron, export, fob main port Black Sea, CIS, was USD305-310 per MT on Thursday, September 12, down from USD315-325 per MT a week
earlier.
“The price of [pig iron substitute] scrap is USD240 [per MT CFR]. It’s crazy! [And] that drags pig iron prices lower and lower,” one trader said. In Turkey - the largest scrap import market - Daily index for US-origin HMS 1&2 (80:20) scrap was USD242.74 per MT CFR on September 12, falling from USD269.61 per MT on September 1 on low demand.
“Now there is a sort of panic in the market, so for those who can wait a little bit and not sell now it is better to hold off for a while,” one supplier said. And an exporter said: “Everybody is on standstill, but there is definitely a buyers’ market now and the demand price better reflects the market,” another exporter said.
In the United States - the largest outlet for CIS-origin pig iron - sources said the workable price was USD335 per MT CFR – equivalent to USD310 per MT fob Black Sea.
In Italy, meanwhile, the workable level was said to be USD330-335 per MT CFR, or close to USD305-310 per MT fob Black Sea. Offers were heard at USD340-345 per MT CFR - equivalent to USD315-320 per MT fob Black Sea.
Weekly price assessment for pig iron, import, CFR Italy, was USD330-340 per MT on September 12, widening downward from USD340 per MT a week before. Italy’s Arvedi, the key pig iron buyer in Italy, is to idle one of its two electric-arc furnaces (EAFs) for eight weeks in mid-November, sources said. That will reduce Arvedi’s production rates by 50-60% over the maintenance period, they added.
Price assessment for low-manganese pig iron, export, fob main port Baltic Sea, CIS, was unchanged at USD350-360 per MT on September 12 because Tulachermet - the only pig iron exporter from the Baltic Sea, has switched to producing foundry grades from basic pig iron.
“We have switched to offers of foundry-grade pig iron because it became more profitable than selling basic pig iron,” the supplier said. “Demand for foundry pig iron will be stable.” Tulachermet had not been producing foundry pig iron in large volumes since November 2018, he added.
The company’s latest basic pig iron offer was USD360-365 per MT fob, but bids were closer to USD345-350 per MT fob. Seaborne iron ore prices rose on September 12 amid Chinses steel makers’ support on stocking up ahead of the week-long holidays of National day starting at October.
Report By: Naeemeh Ferdowsi
