Iron Ore Market in Brief: With the falls in steel, futures, prices sink and stronger dollar
Amid losses in the steel and futures markets, physical iron ore prices fell on Tuesday May 14. This occurred together with the progressive United States Dollar appreciation against Chinese Yuan.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE INDEX | USD 94.34 per tonne cfr Qingdao | -1.76 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 93.02 per tonne cfr Qingdao | -1.76 USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 97.56 per tonne cfr Qingdao | -2.36 USD |
MB 58% FE PREMIUM INDEX | USD 86.00 per tonne cfr Qingdao | -0.61USD |
MB 65% FE IRON ORE INDEX | USD 109.40 per tonne cfr Qingdao | -2.00 USD |
MB 62% FE CHINA PORT PRICE INDEX | 682 yuan per wet metric tonne | -4 Yuan |
KEY DRIVERS
China’s ferrous futures retreated across the board on Tuesday, despite a brief rise for the benchmark iron ore contract around. The contract ended the trading day, at a value 1.5% lower than Monday’s settlement. The country’s domestic rebar and hot-rolled coil prices also declined further on Tuesday, by as much as 50 Yuan (USD 7.25) per ton.
Although a few spot iron ore deals at Chinese ports took place in the morning at prices higher than a day earlier, more of the trades later on Tuesday were reported at lower prices. Seaborne iron ore trading remained less than active during the day, with no deals reported on platforms or via miners’ tender.
The spot secondary market reported several trades of June-index linked Capesize cargoes of Pilbara Blend fines at a premium of USD 2.10 per ton this week. The exchange rate between the US dollar and the Yuan has continued to strengthen to almost 6.87 Yuan to USD 1 compared with nearly 6.82 Yuan to USD 1 a day earlier, and about 6.73 Yuan to USD 1 a week earlier, according to Oanda.com. At the time of publication on Tuesday, the rate given by Oanda was 6.90 Yuan to USD 1.
This factor kept weighing on dollar-denominated seaborne iron ore prices, while underpinning prices at Chinese ports, a trading source in Beijing said. Separately, Brazilian miner Vale said on Monday that it planned to invest another USD 2.5 billion in the next five years to raise the share of dry processing in its iron ore production to 70% from the current 60%. Daily MB 62% Fe Iron Ore Index fell by USD 1.76 per ton on Tuesday, while the daily MB 65% Fe Iron Ore Index decreased by USD 2 per ton.
QUOTE OF THE DAY
“While Brazilian fines are in tight supply in the seaborne iron ore market, Australian Pilbara Blend fines are more bid-for recently. I got one bid at a premium of USD 2.25 per tonne based on the June average of a 62% Fe index today,” a trader in Shanghai told.
Report By: Naeemeh Ferdowsi
