KEY MARKET DRIVERS
China’s ferrous futures have remained range bound in positive territory since Tuesday March 12 night, but they largely retreated on Wednesday afternoon.
As a result, spot iron ore transactions at Chinese ports took place at higher prices in the morning, but sank in the latter half of the day. Seaborne trading remained lackluster during the day, with a miner’s fixed-price tender for Pilbara Blend fines failing to close. While an index-linked seaborne cargo of Jimble bar fines traded at a relatively stable discount, a shipment of Yandi fines was booked at a narrower discount.
Rising costs for such material could push some steelmakers back to benchmark-grade Pilbara Blend fines, market participants said. Blast furnaces, as well as sintering and pelletizing operations in the north China steel hub of Tangshan, remained restricted and may not fully recover until the end of March, a local mill source said. Generally, this is positive for steel prices while negative for raw materials, the mill source added.
The 62% Fe Iron Ore Index fell USD 0.47 per MT on Wednesday, while the daily 65% Fe Iron Ore Index decreased by USD 0.70 per MT. The price movements were based on the visible market activity detailed below, which was included in the index calculation according to the published methodology. For the calculation of the indices, judgment was applied to carry over data in today’s indices due to low liquidity in the 24-hour pricing window, corresponding with published fallback measures.
QUOTE OF THE DAY
“Despite ongoing uncertainty in Vale’s Brazilian iron ore supply since the dam accident in January, shipments [from the South American country] are still looking normal and stockpiles of such materials remain high at Chinese ports. So any shortage is still out of sight,” the mill source said.
Report By: Mohamad Reza Barakchian
