Iron Ore Market in Brief: reduction of iron ore demand and prices with the tighter than expected restrictions
Restrictions on steelmaking in China that are more stringent than had been expected meant that both iron ore demand and prices were reduced on Tuesday September 24.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE FINES INDEX | USD 90.83 per ton CFR Qingdao | -3.29 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 91.22 per ton CFR Qingdao | -3.29 USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 88.84 per ton CFR Qingdao | -2.54 USD |
MB 58% FE PREMIUM INDEX | USD 79.32 per ton CFR Qingdao | -2.54 USD |
MB 65% FE IRON ORE INDEX | USD 97.80 per ton CFR Qingdao | -2.90 USD |
MB 62% FE CHINA PORT PRICE INDEX | 741 Yuan per wet metric ton | -18 Yuan |
MARKET DRIVERS
Finally, a document was issued late Monday asking most local steelmakers to halt their operations of sintering and pelletizing, together with request from several steelmakers to reduce blast furnace production by at least 50%, all by Authorities in Northern China’s Tangshan steel hub. The restrictions were to begin on September 24th ,until further notice intending on cutting harmful emissions.
Last week, some market participants had been expecting a light regime of restrictions on steelmakers in the period leading up to China’s early-October National Day holiday, but the latest
measures turned out to be “more serious.”
This has directly lessened the need for mills in Tangshan to buy iron ore in the short term, both portside cargoes and seaborne shipments, according to sources. China’s iron ore futures have largely trended downward since Monday night, with the benchmark contract ending 2.4% lower than Monday’s settlement level. The October contract for the 62% Fe derivative on the Singapore Exchange had fallen by more than USD 3 per MT as of 6.15pm local time, compared with a day earlier. Physical iron ore trading was much quieter during the day compared with Monday.
QUOTE OF THE DAY
“The strict restrictions on steelmakers in northern cities such as Tangshan could lead to a pile-up of unsold iron ore cargoes, and dent prices,” a mill source in east China said.
PORT PRICES
Report By: Naeemeh Ferdowsi
