Iron Ore Market in Brief: with the future losses, prices soften, FMG widens low-grade adjustments
Physical iron ore prices were weakened on September 17 among losses in the futures markets.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE FINES INDEX | USD 97.17 per ton CFR Qingdao | -1.28 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 97.56 per ton CFR Qingdao | -1.28 USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 96.13 per ton CFR Qingdao | -0.81 USD |
MB 58% FE PREMIUM INDEX | USD 84.56 per ton CFR Qingdao | -1.92 USD |
MB 65% FE IRON ORE INDEX | USD 103.90 per ton CFR Qingdao | -1.40 USD |
MB 62% FE CHINA PORT PRICE INDEX | 774 Yuan per wet metric ton | -11 Yuan |
MARKET DRIVERS
Despite a moderate uptick before the 3pm close, China’s steel and iron ore futures largely trended downward during the day. The benchmark iron ore contract ended 1.8% lower than Monday’s
settlement level.
Spot iron ore trading at Chinese ports turned less active compared with a day earlier, and prices retreated. More seaborne trading activity took place in the day, however, with at least five deals reported on platforms or via miners’ tenders.
A half-Capesize cargo of Pilbara Blend fines required by port restrictions to arrive at Yangtze River ports in China around mid-October was heard traded in the secondary market at the October average of a 62% Fe index at a premium of USD5.30 per MT on a CFR Yangtze River basis.
This could be equivalent to a premium of less than $3 per MT on CFR Qingdao, according to sources. But the low premium could be due to the port restriction of the cargo, while normal shipments of the product linked to the October average of a 62% Fe index could still trade at a premium of USD3.00- 3.80 per MT, they added.
For Brazilian Blend fines, the price gap from Pilbara Blend fines at Chinese ports has been quickly recovering from 20-30 Yuan per. MT earlier this month to zero or even positive recently, with more buying of the former than the latter by mills.
Separately, Fortescue Metals Group (FMG) has continued to widen its downward price adjustment for its lower grade products. Based on a 62% Fe index with Fe content adjusted, the miner is
setting the adjustments at 12%, 7% and 7% for October term-contract shipments of its 56.5% Fe Super Special fines, 58.2% Fe Fortescue Blend fines and 57.3% Fe Kings fines respectively.
These figures compared with 11%, 6% and 2% for September cargoes, according to sources. For its 60.1% Fe West Pilbara fines, FMG is keeping the price adjustment unchanged at 2%.
QUOTE OF THE DAY
“Although miners managed to sell a number of seaborne cargoes yesterday and today, the secondary market selling is not that smooth,” a trader in east China said.
PORT PRICES
Pilbara Blend fines traded at around 745-775 Yuan per MT in Shandong province and Tangshan city on Tuesday, compared with 755-790 Yuan per MT a day earlier. The latest range is equivalent to USD98.40-102.50 per MT CFR China in the seaborne market.
Report By: Javad Najafi
