Iron Ore Market in Brief: Robust trading activity continues on SGX 65% Fe derivative
Physical iron ore prices stayed range-bound on Tuesday April 23 while the 65% Fe derivative on the Singapore Exchange traded actively.
KEY DRIVERS
Trading activity for the Singapore Exchange’s 65% Fe iron ore futures was robust, with 950 lots of May and June contracts traded and cleared by 6.15pm Singapore time on Tuesday, up from 800 lots a day earlier.
This is in line with the price strength of the physical 65% Fe Iron Ore Carajas. The high grade fines traded at 780 Yuan per WMT at Qingdao port and 795 Yuan per WMT at Tianjin port in the day, equivalent to about USD107.60 per MT CFR and USD 109.80 per MT CFR for the seaborne market, according to sources. Port trading was reported to be very active in north China’s steel hub of Tangshan, with prices largely stable from a day earlier. Most of the buyers during the day were steelmakers, likely to be restocking demand for the May 1-4 Labor Day public holiday in China, participants said.
Authorities in Tangshan imposed an interim restriction on sintering operations by 40-100% on local steelmakers from 8am on April 20 to April 25, with mills restocking for when production resumes soon, a trader in Shanghai said. In contrast, seaborne iron ore trading was very quiet during the day, with only one cargo offered on a platform and no transactions confirmed in the spot market. Separately, Fortescue Metals Group (FMG) will narrow the downward price adjustment for May shipments of its 56.5% Fe Super Special fines to 11% from 13% for April cargoes, while widening the adjustment to 8% month on month from 7% in April for 58.2% Fe Fortescue Blend fines, according to sources. The 62% Fe Iron Ore Index, rose by USD 0.05 per MT, while the daily 65% Fe Iron Ore Index increased by USD 0.30 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
“Chinese mills have reduced the use of Brazilian Blend fines in their feedstock, while increasing consumption of similar-Fe-grade Australian fines, because the port price gap between Brazil blend fines and Pilbara Blend fines has widened to around 40 Yuan per MT from 15-20 Yuan per MT earlier,” a mill source in Tangshan said.
Report By: Encieh Arbabi
