Iron ore market on April 5th 2019
Asia iron ore market stays stable on quiet activity
Singapore — the seaborne iron ore market was range-bound Friday with most Chinese participants away on holiday. The 62% Fe Iron Ore Index was assessed at USD 92.80/DMT CFR North China, down 10 cents/DMT day on day. The front-month April TSI swap fell 60 cents/DMT from Thursday to USD 92.35/DMT.
Traders said that as iron ore prices were high they were not keen to buy cargoes on a fixed price basis. Many April-loading shipments were heard to have been delayed to May bringing uncertainty to the seaborne market. “The laycan you bid for could be different from when you actually receive the cargo. It may impact premiums a bit,” a Singapore based trader said.
Supply of Yandi fines was tight in the spot market, and demand was strong among end-users. Two traders said that they will not consider selling Yandi fines at a discount. “Demand for low-grade fines is strong in the spot market. Yandi fines and Kings fines are even more popular after Rio Tinto declared force majeure on some HIY fines buyers,” a China-based trader said.
High-grade Carajas fines saw better trading at ports this week, due to the narrow spread against medium grade fines. The iron ore lump premium was stable. Sellers at ports said that prices for lump cargoes traded at Tangshan ports were around Yuan 20/WMT higher than those traded at Shandong ports, due to an on-going sintering control in the region.
It was assessed that the spot iron ore lump premium at 32.50 cents/DMT unit, unchanged day on day. Prices for domestic concentrates cargoes were unchanged week on week amid firm demand from end-users, although imported iron ore prices rallied over the week. End-users in North China were trying to use as much domestic concentrates as possible as it was cost effective, especially compared with lumps.
The Hebei government plans to close some domestic mines this year on safety concerns, but sources expect the impact on overall supply would be limited. “Many mines were not in production at all, and supply of domestic concentrates is quite sufficient at present,” two procurement sources from Hebei said. Some end-users expect local suppliers to increase prices next week. “Prices may go up by Yuan 30-40/DMT next week,” a procurement source said.
It was assessed 66% Fe domestic concentrate at Yuan 790/DMT delivered to mills in Tangshan Friday, unchanged week on week.
Report By: Naeemeh Ferdowsi
