Iron Ore Market in Brief: Prices fall suddenly on steel weakness
Amid the soft steel markets and demand concerns over China’s probable steel making restrictions, physical iron ore prices fell Wednesday October 9.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE FINES INDEX | USD 91.06 per ton CFR Qingdao | -3.71 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 90.34 per ton CFR Qingdao | -3.71 USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 89.75 per ton CFR Qingdao | -3.75 USD |
MB 58% FE PREMIUM INDEX | USD 80.16 per ton CFR Qingdao | -2.93 USD |
MB 65% FE IRON ORE INDEX | USD 96.70 per ton CFR Qingdao | -4.00 USD |
MB 62% FE CHINA PORT PRICE INDEX | 754 Yuan per wet metric ton | -5 Yuan |
MARKET DRIVERS
China’s iron ore futures have greatly remained range-bound since the night of October 8th but it dived in the last minutes of Wednesday before the market closes. The January benchmark contract ended 2.9% lower than the previous day’s level. Some marketers attributed this to the China steelmakers’ post-holidays performance which was weaker than expectations.
Price assessment for the steel reinforcing bar (rebar) domestic, ex-warehouse Eastern China was at 3,720-3,750 yuan (USD520-525) per MT for the day, down from 3,770-3,800 yuan per MT on September 30, and compared with 4,530-4,570 yuan per MT a year earlier. Local media reported late in the day that the authorities in north China’s steel hub of Tangshan had released a plan asking a part of local steelmakers to cap sintering, pelletizing and blast furnace capacity utilization below 50% from October 10 until the end of the month.
This follows restrictions of as much as 100% for Tangshan steelmakers from late last month to around October 4, and some mills’ partial idling of capacity since then, according to sources. Such measures could continue to weigh on demand for raw materials while somewhat support steel prices, they added.
Port-side iron ore trading activity cooled down compared with Tuesday, while limited buying interest was heard for seaborne cargoes during the day.
QUOTE OF THE DAY
“With the premiums of mid-grade Pilbara Blend fines getting higher, we are considering using high-grade Iron Ore Carajas and some lower-grade fines,” a mill source in east China said.
PORT PRICES
Pilbara Blend fines traded at 740-755 yuan per MT in Shandong province and Tangshan city on Wednesday, compared with 750-760 yuan per MT a day earlier, according to sources. The latest range was equivalent to USD96.70-98.70 per MT CFR China in the seaborne market.
DALIAN COMMODITY EXCHANGE
The most-traded January iron ore futures contract closed at 638.50 yuan per MT on Wednesday, down by 18.50 yuan per MT from Tuesday’s closing price.
Report By: Shahriar Yusefi
