Iron Ore Market in Brief: derivatives fall cause prices down to USD 80 per MT
Physical prices of 62% Fe iron ore tumbled further to around USD 80 per MT, following a plunge in the derivatives market.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE FINES INDEX | USD 80.11 per ton CFR Qingdao | -3.06 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 80.14 per ton CFR Qingdao | -3.06 USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 79.50 per ton CFR Qingdao | -2.55 USD |
MB 58% FE PREMIUM INDEX | USD 69.41 per ton CFR Qingdao | -2.71 USD |
MB 65% FE IRON ORE INDEX | USD 90.70 per ton CFR Qingdao | -2.00 USD |
MB 62% FE CHINA PORT PRICE INDEX | 643 Yuan per wet metric ton | -9 Yuan |
MARKET DRIVERS
China’s steel and iron ore futures have stayed rangebound and in negative territory since Thursday night, and the benchmark January iron ore contract dipped further. The 62% Fe derivatives on the Singapore Exchange extended its downward momentum to around USD 77.70 per MT, compared with the settlement level of USD80.31 per MT on the earlier day.
Seaborne iron ore trading was quiet in the day, especially after the derivatives fall. Market participants were already expecting Pilbara Blend fines and Brazilian Blend fines to trade for less than USD80 per MT CFR on a 62% Fe basis, amid the bearish sentiment.
Chinese steelmakers remained generally unwilling to take in cargoes, and especially mid-grade materials, sources said. Higher-grade and lower-grade fines, as well as lumps, concentrate, and pellets, were relatively outperforming mid-grade fines this week, they added.
China imported 92.86 million MT of iron ore in October, up by 5.1% year on year yet 6.5% lower month on month, according to preliminary Chinese customs data. Imports totaled 877.18 million MT in the first 10 months of the year, down by 1.6% from a year earlier.
QUOTE OF THE DAY
“Steel prices improved this week while raw materials prices weakened, so mill margins are not exactly bad at the moment. Considering the limited availability of spot seaborne supply of high-grade Iron Ore Carajas at the same time, the 65% Fe index level could retain support,” a trader in Shanghai said.
PORT PRICES
Pilbara Blend fines were traded at 635-640 yuan per MT in Shandong province on Friday.
The latest range was equivalent to about USD 84.20-84.90 per MT CFR China in the seaborne market.
DALIAN COMMODITY EXCHANGE
The most-traded January iron ore futures contract closed at 600 yuan per MT on Friday, down by 11 yuan per MT from Thursday’s closing price.
Report By: MohammadReza Barakchian
