Iron Ore Market in Brief: Further fall in seaborne prices on decline in both futures and steel market
On Thursday September 19th, among the descending trend in in the futures and steel market, seaborne prices continued to fall.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE FINES INDEX | USD 93.23 per ton CFR Qingdao | -3.19 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 93.62 per ton CFR Qingdao | -3.19 USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 91.47 per ton CFR Qingdao | -2.96 USD |
MB 58% FE PREMIUM INDEX | USD 81.53 per ton CFR Qingdao | -3.52 USD |
MB 65% FE IRON ORE INDEX | USD 99.90 per ton CFR Qingdao | -3.10 USD |
MB 62% FE CHINA PORT PRICE INDEX | 763 Yuan per wet metric ton | -13 Yuan |
MARKET DRIVERS
There has been further drop in China’s steel and iron ore futures market on Wednesday night and stayed in the range till being sunk in the afternoon. A set of industry data published by a local data provider indicated that steel production and inventories have begun to increase at mills in the country, in contrast to the decreases witnessed earlier this month.
The benchmark iron ore contract ended 4.6% lower than the previous day’s settlement level. On the Singapore Exchange, the October contract for 62% Fe derivatives also tumbled by as much as USD4 per MT compared to Wednesday’s settlement level.
Physical iron ore buying interest was hit by the price drops. A Cape-size cargo of 62% Fe Pilbara Blend fines with laycan in the second half of October was initially offered on a platform at USD93.50 per MT CFR China, but no bid emerged even though the offer was lowered to USD93 per MT CFR.
A Cape-size cargo of the product with laycan in the first half of the October was heard traded in the secondary market at the October average of a 62% Fe index at a premium of USD3.50 per MT. Separately, a draft on measures to control air pollution in 28 cities in northern China for the October 2019-March 2020 period has been circulating among market participants since late Wednesday, but it did not mention any specific requirements for production restrictions on steelmakers.
QUOTE OF THE DAY
“While there were market expectations of serious restrictions on steelmakers around the National Day celebrations in early October, the situation seems not that stern so far. So in the coming winter months, production control may also be light,” a mill source in north China told.
PORT PRICES
Pilbara Blend fines traded around 730-775 yuan per MT in Shandong province and Tangshan city on Thursday, compared with 745-785 yuan per MT a day earlier. The latest range was equivalent to USD95.40-101.60 per MT CFR China in the seaborne market.
Report By: Shahriyar Yusefi
