Iron Ore Market in Brief: Physical iron ore prices fell to USD 83 per MT amid losses in derivatives
On Thursday, November 7 physical iron ore prices were weakened further among derivatives markets’ losses.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE FINES INDEX | USD 83.17 per ton CFR Qingdao | -0.30 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 83.20 per ton CFR Qingdao | -0.09 USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 82.05 per ton CFR Qingdao | -0.81 USD |
MB 58% FE PREMIUM INDEX | USD 72.12 per ton CFR Qingdao | -0.78 USD |
MB 65% FE IRON ORE INDEX | USD 92.70 per ton CFR Qingdao | unchanged |
MB 62% FE CHINA PORT PRICE INDEX | 652 Yuan per wet metric ton | -3 Yuan |
MARKET DRIVERS
On Thursday morning China’s steel and iron ore futures were mostly rangebound, however, they fell in the afternoon, following the benchmark January iron ore contract being closed 2.2% lower than Wednesday level.
The December 62% Fe derivative contract on the Singapore Exchange also sank in the second half of the day to as low as USD79.80 per MT, but it re-bouned to around USD80.20 per MT. A fixed price transaction took place on a platform in the morning for an early-December-loading Capesize cargo of Pilbara Blend fines, equivalent to a premium of just above USD2 per MT based on the December average of a 62% Fe index, according to sources.
While December-index-linked Capesize shipments of the product were likely traded at a premium around USD2 per MT in the secondary market, a miner sold such cargo at a premium of USD2.50 per MT late in the day, they added. The premiums have slipped quickly from a level of USD3.30 per MT secured by the miner on October 29.
For joint cargoes of Pilbara Blend fines and lumps to be loaded early next month, traded levels were at a premium of USD1.50 per MT for the fines part, and no premium for the lumps part, market participants said.
Some sources told that buying an interest in lumps was on the rise due to anticipated restrictions on sintering operations in northern China over the coming winter. For shipments of 65% Fe Iron Ore Carajas to arrive in China in December, participants expect tradable premium at USD1-1.50 per MT at the December average of iron ore index for 65% Fe Brazil-origin fines, CFR Qingdao.
At Chinese ports, transaction prices continued to soften during the day.
QUOTE OF THE DAY
“Steel markets and margins in China are not looking good for the coming months and some have started de-stocking steel products,” a source at a mill in eastern China said.
PORT PRICES
Pilbara Blend fines were traded at 648-652 yuan per MT in Shandong province on Thursday. The latest range is equivalent to about USD 85.90-86.40 per MT CFR China in the seaborne market.
DALIAN COMMODITY EXCHANGE
The most-traded January iron ore futures contract closed at 611 yuan per MT on Thursday, down by 10.50 yuan per MT from Wednesday’s closing price.
Report By: Encieh Arbabi
