Iron Ore Market in Brief: the 65% Fe index resists the downward trend on strong desire from steel mills
Only the high-grade iron ore prices resisted the overall descending trend of prices on Friday, October 18 amid a reasonable desire for raw materials of steelmakers.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE FINES INDEX | USD 86.36 per ton CFR Qingdao | -0.70 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 85.40 per ton CFR Qingdao | -0.70 USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 84.93 per ton CFR Qingdao | -0.91 USD |
MB 58% FE PREMIUM INDEX | USD 75.48 per ton CFR Qingdao | -1.08 USD |
MB 65% FE IRON ORE INDEX | USD 94.90 per ton CFR Qingdao | +1.20 USD |
MB 62% FE CHINA PORT PRICE INDEX | 685 Yuan per wet metric ton | -14 Yuan |
MARKET DRIVERS
According to market participants, the Chinese steelmakers were interested in 65% Fe Iron Ore Carajas (IOCJ). According to sources, the governing interest in the market was for IOCJ with several steel mills blending the high-grade raw material with lower grade iron ore fines.
At least two Chinese mill sources have predicted that “a widening spread between the 65/62 grades” among the ample supplies’ negotiations for mid-grade fines and a potentially tighter supply of high-grade fines.
Due to the continuing supplies from Australia which improves adding to the supply glut at Chinese ports, market participants believe mid-grade iron ore prices will proceed to face the downward pressure and likely to remain below USD 90.
While China’s iron ore futures trended down most of the day, with the most-traded January contract falling -2.7%. however, at the end of the market day, the benchmark contract ending around 0.2% higher than Thursday’s closing price.
QUOTE OF THE DAY
“The appetite for Iron Ore Carajas is still healthy among the mills. It seems [as though] some have started blending the high-grade raw material with low-grade fines as it seems to make more economic sense,” an east China mill source said.
PORT PRICES
Pilbara Blend fines traded at 670-690 yuan per MT in Shandong province and Tangshan city on Friday, compared with 685-704 yuan per MT on Thursday, according to sources. The latest range was equivalent to USD87.90-90.60 per MT CFR China in the seaborne market.
DALIAN COMMODITY EXCHANGE
The most-traded January iron ore futures contract closed at 616 yuan per MT on Friday, up by 1 yuan per MT from Thursday’s closing price.
Report By: Javad Najafi
