Iron Ore Market in Brief: uncertain market demand causes seaborne prices to fall below USD 85
On Monday, November 4, for the first time since August 30, the prices for mid-grade seaborne iron ore slid to less than USD 85 per MT CFR China.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE FINES INDEX | USD 83.27 per ton CFR Qingdao | -2.29 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 83.09 per ton CFR Qingdao | -2.29 USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 82.71 per ton CFR Qingdao | -2.23 USD |
MB 58% FE PREMIUM INDEX | USD 73.19 per ton CFR Qingdao | -1.86 USD |
MB 65% FE IRON ORE INDEX | USD 93.10 per ton CFR Qingdao | -1.70 USD |
MB 62% FE CHINA PORT PRICE INDEX | 665 Yuan per wet metric ton | unchanged |
MARKET DRIVERS
On Monday, January iron ore future’s benchmark of China trended downward through the day and ended to about 1.7% lower than last Friday’s closing price. The November and December 62% Fe derivative contracts on the Singapore Exchange (SGX) also fell by around USD1.70 per MT and USD1.60 per MT respectively from the previous trading day’s settlement prices.
Miners issued offers for seaborne iron ore cargoes via tenders and trading platforms, but no deals were concluded at fixed prices. A Chinese trading company was heard to have maintained its fixed-price offer of a December-arrival Capesize cargo of Pilbara Blend fines on a trading platform, but no bids were made for it. The lowest offer for the cargo was equivalent to a premium of USD2.70 per MT at the December average of a 62% Fe index, according to sources.
Market participants generally had a pessimistic outlook for demand for steel products, which in turn made them bearish about that for iron ore as well. Winter production curbs in China remained unclear, which added to the uncertainty. Separately, Brazilian miner Vale said late last Friday that it would resume operations at its Alegria mine. It maintained its full-year sales guidance at 307-332 million MT.
QUOTE OF THE DAY
“The market was very bearish today. Mills are also fearful of building up steel inventories,” a steelmaker source in eastern China said.
PORT PRICES
Pilbara Blend fines were traded at 655-662 yuan per MT in Tangshan city and Shandong province on Monday. The latest range is equivalent to about $86.40-87.40 per MT CFR China in the seaborne market.
DALIAN COMMODITY EXCHANGE
The most-traded January iron ore futures contract closed at 615 yuan per MT on Monday, down by 10.50 yuan per MT from last Friday’s closing price.
Report By: Parya AhmadPour
