Iron Ore Market in Brief: with the unease potential for further steelmaking restrictions in China, prices rise
Seaborne iron ore prices grew on Monday September 23rd following steel market gains, among assumptions that there will be more restrictions on steelmaking in China.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE FINES INDEX | USD 94.12 per ton CFR Qingdao | +1.56 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 94.51 per ton CFR Qingdao | +1.56 USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 91.38 per ton CFR Qingdao | +0.60 USD |
MB 58% FE PREMIUM INDEX | USD 81.85 per ton CFR Qingdao | +1.49 USD |
MB 65% FE IRON ORE INDEX | USD 100.70 per ton CFR Qingdao | +1.70 USD |
MB 62% FE CHINA PORT PRICE INDEX | 759 Yuan per wet metric ton | -1 Yuan |
MARKET DRIVERS
Following some new updates on steelmaking restrictions reported from north China’s steel hub pf Tangshan over the past weekend, consisting of a sintering production cut of minimum 50%, and a suspension of trucking at the two ports in the city from September 22nd to September 27th.
Quotations imply that only one of the three sintering machines at the mill was active on Monday, while according to another mill source its sintering production would fully stop from Tuesday and was likely to remain halted until the end of the month.
Reports of the local media suggest that the Tangshan authorities were planning to refine the classification of ‘steelmaker’ to apply restrictions of 20-55% in the autumn-winter period. Consequently, China’s steel futures recorded gains on Monday whereas the futures iron ore fell.
The benchmark rebar and hot-rolled coil contracts kept climbing during the day to end the day up by 3.6% and 3%, respectively, from Friday’s settlement levels. The benchmark iron ore contract also started to trend up, especially in the afternoon, partly thanks to data showing that the number of iron ore cargo arrivals at Chinese ports had dropped week on week, according to sources.
However, with Chinese steelmakers having largely finished their restocking ahead of the October National Day holidays and the Tangshan port blockage, iron ore trading activity at the docks was “just so-so,” sources said. Transactions for seaborne fines recorded in the day were all on an index-linked basis, although market participants expected higher fixed-price levels for mainstream brands.
QUOTE OF THE DAY
“Given an annual industry conference to be held later this week and China’s early October week-long break, trading time [will be limited] in the coming month, so sellers [face increased] pressure in marketing their cargoes,” a trader in Shanghai told.
PORT PRICES
Pilbara Blend fines traded at 738 Yuan per MT in Shandong province on Monday, equivalent to USD 96.40 per MT CFR China in the seaborne market.
Report By: MohammadReza Barakchian
