Iron Ore Market in Brief: the progressive edge up of seaborne iron ore prices despite limited market activity
After the long day rangebound prices, seaborne iron ore prices edged up again on Thursday October 24, despite limited activity in the market.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE FINES INDEX | USD 87.34 per ton CFR Qingdao | +0.16 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 87.16 per ton CFR Qingdao | +0.16 USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 85.96 per ton CFR Qingdao | +0.30 USD |
MB 58% FE PREMIUM INDEX | USD 77.14 per ton CFR Qingdao | +0.44 USD |
MB 65% FE IRON ORE INDEX | USD 95.70 per ton CFR Qingdao | +0.30 USD |
MB 62% FE CHINA PORT PRICE INDEX | 685 Yuan per wet metric ton | unchanged |
MARKET DRIVERS
Chinese benchmark January iron ore futures trended largely sideways for most of the Thursday trading session, but a spike was observed just before the market closed, ending about 1.2% higher compared to the previous day’s settled price. According to a Singapore-based futures analyst, the rally at the end of the trading session was likely to have been prompted by the end of environmental restrictions imposed on some Chinese mills in the steelmaking hub of Tangshan.
Another analyst said the slight increase in demand for iron ore could have arisen from some mills making an effort to restock before even stricter restrictions are imposed in the upcoming winter season. Mid-grade iron ore port inventories seem to be growing, while there is still some drawdown on the high-grade iron ore inventories, suggesting that demand for mid-grade iron ore may have weakened, according to trade sources.
The November 62% Fe iron ore derivative contract on the Singapore Exchange (SGX) also saw limited movement in its price, ending the trading session about USD0.40 per MT higher than the previous day.
But the 65% iron ore derivative contract offered by SGX saw trade volumes pass 3 million MT for the first time since its introduction in December 2018. Meanwhile, Australian miner Fortescue Metals Group (FMG) maintained its shipment guidance for its 2020 financial year iron ore at 170-175 million MT.
QUOTE OF THE DAY
“Traders’ outlook for steel is still pessimistic, and there seems to be a general sense of destocking as sellers have prioritized liquidating positions,” a China-based trade source said.
PORT PRICES
Pilbara Blend fines traded at 675-690 yuan per MT in Shandong province on Thursday, according to sources. The latest range was equivalent to USD88.70-90.80 per MT CFR China in the seaborne market.
DALIAN COMMODITY EXCHANGE
The most-traded January iron ore futures contract closed at 628 yuan per MT on Thursday, up by 7.50 yuan per MT from Wednesday’s closing price.
Report By: Mohammadreza Barakchian
