Iron Ore Market in Brief: futures gains and steel inventory drop lead to a recovery of prices
Seaborne iron ore prices were recovered on Thursday, October 10 after the earlier day’s huge fall in thanks to the futures market’s gains.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE FINES INDEX | USD 93.68 per ton CFR Qingdao | +2.62 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 94.23 per ton CFR Qingdao | +3.89 USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 92.08 per ton CFR Qingdao | +2.33 USD |
MB 58% FE PREMIUM INDEX | USD 82.39 per ton CFR Qingdao | +2.23 USD |
MB 65% FE IRON ORE INDEX | USD 99.30 per ton CFR Qingdao | +2.60 USD |
MB 62% FE CHINA PORT PRICE INDEX | 746 Yuan per wet metric ton | -8 Yuan |
MARKET DRIVERS
A Chinese data provider released a set of industry data early in the afternoon, which indicated a rise in the production of major steel products in the country compared with the earlier this week. This was despite the large drop in the inventory volumes at mills and in the market, particularly for rebar.
With the benchmark iron ore contract compensating for Wednesday losses, china’s rebar and iron ore futures both rose in the afternoon. Also, the spot iron ore trading activity boomed at Chinese ports despite some prices were lower than the previous day.
A miner was heard to have sold a cargo of Pilbara Blend fines at a fixed price equivalent to more than USD 94 per MT CFR China on 62% Fe basis, or a premium in excess of USD 5.50 per MT based on the November average of a 62% Fe index.
In the secondary market, however, a similar-laycan shipment of the product was offered at USD 93 per MT CFR on 62% Fe basis and could not attract any bids. November-index-linked offers were made at a premium around USD 4.20 per MT for such cargoes, according to sources.
QUOTE OF THE DAY
“The sudden drop yesterday and quick rise today in futures prices could be related to capital speculation, with a limited real change in market fundamentals. Steelmakers are still more often buying from ports than the seaborne market, holding a cautious outlook on steel prices in the fourth quarter,” a trader in east China said.
PORT PRICES
Pilbara Blend fines traded at 730-750 yuan per MT in Shandong province and Tangshan city on Thursday, compared with 740-755 yuan per MT a day earlier, according to sources. The latest range was equivalent to USD95.40-98.20 per MT CFR China in the seaborne market.
Report By: Encieh Arbabi
