Iron Ore Market in Brief: Anticipating looser production restrictions, seaborne prices move up
With the probable looser production restrictions in North China, the physical iron ore prices moved up.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE FINES INDEX | USD 94.77 per ton CFR Qingdao | +1.36 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 94.05 per ton CFR Qingdao | +1.14 USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 93.50 per ton CFR Qingdao | +1.78 USD |
MB 58% FE PREMIUM INDEX | USD 83.09 per ton CFR Qingdao | +0.81 USD |
MB 65% FE IRON ORE INDEX | USD 100.70 per ton CFR Qingdao | +0.30 USD |
MB 62% FE CHINA PORT PRICE INDEX | 759 Yuan per wet metric ton | +20 Yuan |
MARKET DRIVERS
According to market sources, Tangshan steelmaking production restriction in North China is expected to be eased after the seven day-long National holidays of China, leading to a probable demand surge for iron ore. This prompted to support the iron ore futures contract January benchmark experience a rise by more than 2%, however, the contract started to fall from the middle of the day, with an eventual overall 0.7% rise.
Some market analysts believe that participants are being conservative and prefer to wait until after the intended trade talks between the United States and China are over. The trade talks are scheduled to take place on Thursday, October 10.
Whereas, limited Pilbara Blend fines supply continued to support prices in its latest deal, as marketers consider the deal was closed around USD 94.05 per MT on a 62% basis, comparing to the end of September USD 92.75-93 transactions.
Iron ore exports from Western Australia’s Port Hedland totaled 41.97 million MT in September, down by 3.5% year-on-year and 7.6% lower than 45.43 million MT in August, according to the Pilbara Ports Authority. Of the total, 36.05 million MT were bound for China, down 3.6% on the year and 5.5% lower month-on-month.
QUOTE OF THE DAY
“Mills seems to be showing more interest in prices of lumps, pellets and concentrates as the prices for [iron ore] fines are looking high, so it might start to make more economical sense to switch to the higher-grade iron ore products instead,” a trader said.
PORT PRICES
Pilbara Blend fines traded at 750-760 yuan per MT in Shandong province and Tangshan city on Tuesday, according to sources. The latest range was equivalent to $97.30-98.70 per MT CFR
China in the seaborne market.
DALIAN COMMODITY EXCHANGE
The most-traded January iron ore futures contract closed at 657 yuan per MT on Tuesday, up by 1.50 yuan per MT from Monday, September 30 closing price.
Report By: Parya AhmadPour
