Iron Ore Market in Brief: Seaborne prices surge to USD 93 per ton CFR
KEY MARKET DRIVERS
Prices jump above USD 95 per ton CFR on futures spike
Physical iron ore prices increased further on Monday April 8, with 62% Fe Iron Ore Index jumping above USD 95 per ton CFR China following surges in the derivatives markets.
KEY DRIVERS
China’s ferrous futures advanced across the board in the first trading day after a three-day break for the Tomb Sweeping Festival. Iron ore continued to lead the gains, with the May and September contracts both closing 4.3% higher than their settlement levels last Thursday. The September contract overtook May to become the most-traded iron ore contract during the day.
On the Singapore Exchange (SGX), the April and May 62% Fe contracts increased by around USD 2 per ton in the day, while April and May 65% Fe contracts traded at USD105.50-107 per ton CFR. Spot iron ore trading activity at Chinese ports was said to be “not bad”, with transaction prices rising during the day, according to sources.
The spot seaborne market remained quiet with Rio Tinto and BHP still absent. There was a fire at Western Australian Port of Dampier on Monday, according to market participants, but no specific impact on operations had been reported at the time of publication. Rio Tinto ships iron ore from the port in the Pilbara region.
“[Iron ore prices] seem more boosted by speculation on supplyside news than real fundamentals,” a trader in Shanghai said. 62% Fe Iron Ore Index rose by USD 2.40 per ton on Monday, while the daily MB 65% Fe Iron Ore Index increased by USD1.30 per ton. 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 upward trend seen in China’s iron ore futures [probably reflects the fact] that the market is still reacting to the lack of April shipment spot cargoes mainly from Australia,” a China-based trader said.
Report By: Encieh Arbabi
