Iron Ore Market in Brief: Prices still range-bound, market awaits full impact of cyclone on Australian output
KEY MARKET DRIVERS
Australia’s Pilbara Port Authority (PPA) said on Tuesday afternoon that there had been no significant damage caused by cyclone Veronica at any of the ports and that operations will return to normal over the next 24 hours. While Port Hedland reopened on Tuesday morning following an infrastructure assessment - after a closure totaling 92.5 hours or just under four days - Port Dampier is still going through an impact assessment, according to PPA. Several market participants said operations could also have resumed at Dampier on Tuesday, and there was talk in the market that one Australian miner’s railway might have been affected by the cyclone, which could lead to supply disruptions. In Brazil, Vale said late on Monday that it would not restart operations at its 30-million-tonne-per-year Brucutu mine as early as stated last week, due to a court order halting activity at containment structures, including the tailings dam used by the mine. Meanwhile, China’s iron ore futures moved moderately higher on Monday night compared with the day session close, but weakened again on Tuesday, particularly in the afternoon.
On the Singapore Exchange, the April and May 62% Fe contracts dipped in line with China’s futures until about 4pm, when they started to rebound by as much as 1 USD per MT. The April and May 65% Fe contracts recorded transactions totaling 155,000 MT during the day. China’s spot steel markets remained soft, however, with rebar prices falling 10-40 RMB (USD 1.5-6) per MT in the day. Spot iron ore trading at Chinese ports also remained lackluster, with prices little changed, while the seaborne market continued to report thin activity. Restrictions on sintering operations in north China’s steel hub of Tangshan are expected to be eased next week, which some market participants believe will support iron ore demand. The price movements were based on the visible market activity detailed below, which was included in the index calculation according to the published methodology.
QUOTE OF THE DAY
“The delay in start of operations at Vale’s Brucutu mines should have limited impact on the prices of Brazilian fines, because most of the overreaction had already happened back in January when the dam ruptured, also most traders and buyers have already factored in the possible lack of supply from Vale’s Brazilian operations,” a China-based trader said.
Report By: Shahriyar Yusefi
