Iron Ore Market in Brief: Prices still range-bound amid rumors of Vale restart
Physical iron ore prices showed only small changes, or did not change, on Friday April 26 amid mixed news in the market.
KEY DRIVERS
There was market chatter on Friday after a Brazilian steel institute official said on Thursday that Vale’s Vargem Grande iron ore mining complex might restart operations in 15-20 days’ time. Vale had made no announcement on this subject at the time of publication, however. The Vargem Grande complex, with capacity for 13 million tons per year, was idled by the miner at the beginning of February, after a breach of one of its tailings dams late in January resulted in
numerous deaths and significant environmental damage.
Iron ore market participants in China which spoke to on Friday said that a restart was more likely to be wishful thinking by the institute, probably because of the tight supply in the local iron ore market in Brazil. China’s iron ore futures and Singapore Exchange’s iron ore derivatives showed limited response to the news, with prices fluctuating within a narrow range. But weekly data published by a local data provider showed that iron ore stocks at 45 major Chinese ports fell by more than 4 million tons to 134.27 million tons on Friday.
There could be further such draw-downs in inventories given the robust iron ore consumption by Chinese steelmakers and the reduced number of seaborne cargo arrivals, especially from Brazil, a trader in Beijing said. Spot iron ore trading stayed relatively thin during the day, whether at ports or in the seaborne market, amid flat prices.
The 62% Fe Iron Ore Index rose by USD 0.08 per ton, while the daily 65% Fe Iron Ore Index was unchanged. 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
“Although iron ore shipments from Australia seem largely to have recovered from the cyclone last month, there could be further disruptions caused by maintenance and overhauls later,” according to trader in northern China.
Report By: Javad Najafi
