Iron Ore Market in Brief: A new ride in seaborne prices
Seaborne iron ore prices experienced another advance on Friday May 24 among strong trading activity.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE INDEX | USD 105.32 per tonne cfr Qingdao | +1.53 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 103.51 per tonne cfr Qingdao | +1.53 USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 108.80 per tonne cfr Qingdao | +0.90 USD |
MB 58% FE PREMIUM INDEX | USD 96.02 per tonne cfr Qingdao | +0.77 USD |
MB 65% FE IRON ORE INDEX | USD 119.30 per tonne cfr Qingdao | +0.80 USD |
MB 62% FE CHINA PORT PRICE INDEX | 743 yuan per wet metric tone | +5 Yuan |
KEY DRIVERS
Iron ore stockpiles at 45 major Chinese ports totaled 127.68 million ton on Friday, down 4.39 million ton from a week earlier, according to a local data provider.
Higher blast furnace capacity utilization rates among Chinese steelmakers and no significant increase in seaborne iron ore supplies have continued to drag down port inventories, according to sources. The balance of general iron ore supply and demand has turned further in the direction of tightness, they added.
And while transaction prices at Chinese ports increased, there were at least six deals reported in the seaborne iron ore market during the day at stronger fixed prices or steady premiums based on indices, sources told.
Demand for low-alumina material has continued, with most mills still making good profits, a trader in Shanghai told. But he added that some consumers have hesitated over high-priced brands, such as Iron Ore Carajas and Brazilian Blend fines, and have turned to lower-cost alternatives such as Yandi fines.
Two index-linked cargoes of Yandi fines traded at a premium of $1.85 per ton this week, compared with a premium of USD0.55-0.60 per ton a fortnight earlier, and at a discount of USD1.30 per ton a month earlier.
With lower-ranked 62% Fe brands recently becoming relatively expensive, prices for Pilbara Blend fines could also strengthen, the trader said.
Daily MB 62% Fe Iron Ore Index rose by USD1.53 per ton while the 65% Fe Iron Ore Index rose USD0.80 per ton from the previous day.
QUOTE OF THE DAY
“Profit margins of steel mills in China improved a bit this week, but it’s still uncertain if this could persist,” a mill source in Beijing said.
Report By: Mehrdad Najafi
