Iron ore market review on April 26th 2019
Asian iron ore market edges up on traders buying
The Asian seaborne iron ore market edged up Friday on better demand from traders, while offers for May arrival cargoes were heard limited.
It was assessed the 62% Fe Iron Ore Index at USD 92.80/dry MT CFR North China Friday, up 20 cents/ DMT on day. The front-month May TSI swap was up 30 cents/ DMT on day at USD 90.80/DMT.
"There are not many 1H May loading Pilbara Blend fines available, and demand for medium grade fines is strong this week," a Beijing-based procurement source said. With improved steel margins, some end-users are using medium grade fines to replace low grade fines in feed stock blending, sources said.
Premium for floating price cargoes went up as well. H1 May loading Pilbara Blend fines was heard traded in the range of USD 2-2.20/ DMT premium level in spot market. Less supply of MAC fines also pushed up prices at ports. Demand for low alumina content Yandi fines was strong while supply was tight.
BHP sold 170,000 MT of 57% Fe Yandi fines at flat over May 62% assessment Thursday evening through bilateral negotiations, loading May 11-20. Port stocks inventory fell around 4. Million MT on week, and some traders were buying actively in the seaborne market for reselling opportunity at ports. "Stocks for Brazilian cargoes have been depleting which will lead to higher bids for seaborne cargoes," an international trader said.
A private steelmaker added that sintered ores were the most cost-effective feed stock compared to lump and pellet. But transaction volume was heard low at Chinese ports on Friday. "Steelmakers have restocked enough for holiday in early May," a procurement source from Hebei said.
The iron ore 62% Fe iron ore port stock index, or IOPEX North China, was assessed at Yuan 677/ WMT FOT, up Yuan 3/ WMT on day, or at USD 92.48/ DMT on import parity basis.
IOPEX East China was assessed at Yuan 677/WMT FOT, flat on day, or at USD 92.48/ DMT on import parity basis. Demand for lump was heard split in different regions. Lump premium was trading at high levels at Shandong ports, while lump demand at Tangshan ports was quiet.
Mills in Hebei province used more domestic concentrates in blast furnaces rather than buying lumps, sources said. The spot lump premium was assessed at 31 cents/dry MT unit, flat on day, in line with tradable values. Domestic concentrate market edged up this week on strong demand.
Increased steel margins and demand for low alumina cargoes encouraged more buying interest for domestic ores. End-users said usage ratio of domestic concentrates is unlikely to go down in the short run, as it is still cost-effective compared with imported ores.
Meanwhile, the market expected that supply of domestic concentrates will remain stable this year. The 66% Fe domestic concentrate was assessed at Yuan 830/ DMT delivered to mills in Tangshan Friday, up Yuan 10/ DMT on week.
Report By: Naeemeh Ferdowsi
