Iron Ore Market in Brief: Prices continue to trend down, interest in iron ore lump grows
Seaborne iron ore prices continued to slide on Wednesday April 10, while the seaborne spot market remained subdued with no open tenders being issued by the major miners.
KEY DRIVERS
Seaborne trading activity remained limited in the iron ore market on Wednesday, most likely due to the supply disruption caused by Tropical Cyclone Veronica last month. A spot bilateral sale was said to have been concluded for a May-loading 62% Fe Pilbara Blend fines cargo at an index-linked price of USD 2.41 per ton, according to trade sources. Some market participants believe that price was on the high side, but added that it was likely to be supported by the tight spot supply.
In addition, some market participants believe the absence of open tenders from miners was a strong signal that most were focused on meeting the cargo commitments for their respective long-term contracts. Meanwhile, market sources have shown particular interest in iron ore lump since news of a fire at a Rio Tinto screening facility on East Intercourse Island in Western Australia has prompted tightness in iron ore lump supplies.
In addition, traders said that no iron ore lump has been exported from Cape Lambert since a fire there in January. As a result of tighter supplies, Chinese mills were heard to have been procuring iron ore lump cargoes from other ports because long-term contract commitments have been delayed. This sentiment was echoed in the swaps market, where brokers told there was a similar rising trend for iron ore lump prices for May and June contracts. Fe Iron Ore Index fell by USD 0.24 per ton on Wednesday, while the 65% Fe Iron Ore Index was down USD 0.10 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
“Iron ore lump seems to have garnered quite strong buying interest on the swaps front and with Rio Tinto’s two separate fires this year iron ore lump prices are likely see a rise,” according to a Singapore-based trader.
Report By: Mehrdad Najafi
