Iron Ore Market in Brief: with further disruptions in Brazil, prices jump
Iron ore prices jumped above USD 95 per ton CFR again on Tuesday May 7 after further disruption at Vale’s Brucutu mine in Brazil.
KEY DRIVERS
With the latest suspension ordered by a higher local court, Vale’s 30-million-ton-per-year Brucutu mine has experienced more twists and turns, the miner said late on Monday. Vale now expects its 2019 iron ore and pellet sales to fall between the bottom and the middle of its targeted 307-332 million tons, compared with earlier expectations it would be closer to the middle of the range.
China’s ferrous futures all witness an advance on Tuesday, although there were downward corrections in the afternoon, especially for steel contracts. Two early-June Capesize shipments of Pilbara Blend fines were sold by a miner, one at a fixed price USD 1.60 per ton higher than the last deal a week ago, and the other at a premium of USD 2.25 per ton based on the June average of a 62% Fe index.
Tradable levels in the secondary market are at a premium of USD 2 per ton for Capesize PB fines, and a premium of USD 1.80 ton for joint cargoes of PB fines and lumps, according to sources. Iron ore offer and transaction prices at Chinese ports rose significantly in the day, with a widening gap between offers and bids, some market participants said.
More blast furnaces in north China’s steel hub of Tangshan were heard to have been idled amid a campaign by the local authorities to cut emissions, but the restrictions’ progress has been gradual rather than drastic. Emissions controls also extend to port operations along the Yangtze River, with Nantong port and Luojing port likely to be shut down, sources said.
Such measures could lead to more congestion at other Yangtze River ports, an inland mill source told. Daily MB 62% Fe Iron Ore Index rose by USD 1.81 per ton, while the daily MB 65% Fe Iron Ore Index increased by USD 0.80 per ton.
QUOTE OF THE DAY
“The price surge triggered by the Brucutu suspension could be somewhat over-speculated, and a correction may come very soon,” a mill source in north China said.
Report By: Javad Najafi
