Iron Ore Market in Brief: Seaborne iron ore prices rise following the futures market gains
On Tuesday, Seaborne iron ore prices were strengthened as the consequence of derivatives markets’ gains.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE FINES INDEX | USD 93.00 per ton CFR Qingdao | +1.51 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 92.04 per ton CFR Qingdao | +0.01 USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 91.60 per ton CFR Qingdao | +1.43 USD |
MB 58% FE PREMIUM INDEX | USD 80.98 per ton CFR Qingdao | +1.55 USD |
MB 65% FE IRON ORE INDEX | USD 98.90 per ton CFR Qingdao | +1.90 USD |
MB 62% FE CHINA PORT PRICE INDEX | 732 Yuan per wet metric ton | -9 Yuan |
MARKET DRIVERS
Since early Monday, China’s steel and iron ore futures have been largely weak however they moved up on Tuesday’s last minutes of the market. The contract of benchmark iron ore was finalized at a higher price than the earlier day.
Afterward, the iron ore derivates on Singapore Exchange also advanced, with the 62% Fe contract of November surged to approximately USD 88 per MT compared with the USD 86.51 per MT of the earlier day been settled.
For spot iron ore prices also, transactions occurred at lower prices than the day before whereas after the aforesaid rise, limited deals were reported to be taken place.
A miner was heard to have sold a cargo of Pilbara Blend fines at a fixed price almost the same as earlier day, through a tender. This was while fixed price deals were also concluded on a platform for Brazilian Blend fines and iron ore Carajas.
Also, according to sources, Index-Based premiums were strengthening for high-grade Iron ore Carajas.
According to a Chinese mill source, their company had recently bought a Cape-sized cargo of products due to their early arrival in November, at the average of the index for 65% Fe Brazil-Origin fines, CFR Qingdao, plus USD 1 per MT premium.
However, according to other sources, such shipments could cost a premium of USD 2 per MT in particular for smaller cargo sizes such as half-capesize. Separately, local media reported late in the day that north China’s Tangshan city has decided to initiate emergency response to air pollution, asking most local steelmakers to suspend sintering and pelletizing operations from Tuesday.
This was based on an existing requirement for most mills in the city to cap their capacity utilization in sintering, pelletizing and blast furnace use to less than 50% from October 10 until the end of the
month.
QUOTE OF THE DAY
“The relative cost-effectiveness of IOCJ to go with lower-grade materials, compared with mid-grade Pilbara Blend fines, given a still narrow 65/62% Fe spread, could explain its stronger premiums,” a trader in Shanghai said.
PORT PRICES
Pilbara Blend fines were traded at 720-730 yuan per MT in Shandong province and Tangshan city on Tuesday, compared with 725-750 yuan per MT on Monday, according to sources. The latest range was equivalent to USD94.90-96.30 per MT CFR China in the seaborne market.
DALIAN COMMODITY EXCHANGE
The most-traded January iron ore futures contract closed at 644 yuan per MT on Tuesday, up by 5.50 yuan per MT from Monday’s closing price.
Report By: Naeemeh Ferdowsi
