Iron Ore Market in Brief: Further weak prices among losses in steel market
Physical iron ore prices progressed with their sliding prices on September 20 together with the steel markets’ losses continue.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE FINES INDEX | USD 92.56 per ton CFR Qingdao | -0.67 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 92.95 per ton CFR Qingdao | -0.67 USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 90.78 per ton CFR Qingdao | -0.69 USD |
MB 58% FE PREMIUM INDEX | USD 80.36 per ton CFR Qingdao | -1.17 USD |
MB 65% FE IRON ORE INDEX | USD 99.00 per ton CFR Qingdao | -0.90 USD |
MB 62% FE CHINA PORT PRICE INDEX | 760 Yuan per wet metric ton | -3 Yuan |
MARKET DRIVERS
China’s steel futures stayed in the negative territory on Thursday night and on Friday, while the spot rebar and hot-rolled coil prices in the country also fell 20-60 yuan per MT on Friday.
Spot iron ore trading at Chinese ports cooled down during the day and prices softened. Pessimism extended to the seaborne iron ore market as well, with low buying interest heard in the secondary market, although some miners still managed to sell a few seaborne cargoes.
And concerns over steel prices in China in the coming months remain, because the looser production restrictions on steelmakers are likely to affect iron ore prices, according to sources. Iron ore indices were all down for the day, with price movements were based on the visible market activity detailed below, which was included in the index calculation.
The export market for pig iron from the Commonwealth of Independent States (CIS) remained dead silent over the week to Thursday September 19, with sellers and buyers yet to agree on a
workable price level for both sides.
Weekly price assessment for high-manganese pig iron, export, FOB main port Black Sea, CIS reduced week on week to USD 295-305 per MT on Thursday September 19, down from USD305-310 per MT a week earlier.
“There is confrontation between buyers and sellers,” one source from the CIS said. “Some big customers are very aggressively pointing to plunging [pig iron substitute] scrap prices, while CIS [suppliers] are being squeezed by raw materials prices.”
In Turkey - the largest scrap import market - daily index for US-origin HMS 1&2 (80:20) scrap was USD233.32 per MT CFR on September 19, down from USD242.74 per MT CFR on September 12.
“Everyone is waiting for the first deal to the United States [the largest global pig iron importer], which will help to indicate where the market level is and trading will resume in other outlets,” one trader said.
The price level for CIS pig iron suppliers into the US was suggested to be USD325-330 per MT CFR, which would be around USD300-305 per MT FOB Black Sea. Although the workable level for buyers was heard at USD320 per MT CFR, or USD295 per MT FOB.
Weekly price assessment for pig iron, import, CFR Italy was USD315-325 per MT on September 19, down from USD330-340 per MT a week before.
In Italy suppliers placed the price at USD325-330 per MT CFR, or USD300-305 per MT FOB, as well. Although the workable level for buyers was USD315 per MT CFR, which would be equivalent to USD290 per MT FOB Black Sea.
A small sale was done to Italy at slightly above USD325 per MT CFR, or USD300 per MT FOB, was told. “The Italian [pig iron] market is becoming more complicated because there is availability in the domestic market,” another trader said. “Domestic material is available at a slightly higher price [than imports] but freight costs are lower, so it can compete with import material.”
Price assessment for low-manganese pig iron, export, FOB main port Baltic Sea, CIS was USD330-340 per MT on September 19, down from USD350-360 per MT a week before. Offers from Tulachermnet – the only pig iron supplier from the Baltic Sea – was at USD340 per MT FOB. Although despite the decline in offers from USD360 per MT FOB earlier in September, this price was still unworkable for buyers, who are interested in a USD330-per-MTFOB level.
“Tulachermet will decrease its basic pig iron production because costs are above achievable sales price,” another trader said. The company aims to increase its output of foundry-grade pig iron after it became more profitable than selling basic pig iron.
QUOTE OF THE DAY
“Although iron ore prices retreated this week, we still see support in coming months given the likely decreases in shipments and arrivals due to some miner maintenances, as well as steady steelmaking demand with less strict restrictions in China,” a mill source in east China told.
PORT PRICES
Pilbara Blend fines traded around 748-760 yuan per MT in Tangshan city on Friday, equivalent to USD 97.70-99.40 per MT CFR China in the seaborne market.
Report By: Encieh Arbabi
