A review on Iron ore market, June 7th 2019
Iron ore stable amid China holiday break
The seaborne iron ore market was stable Friday as Chinese market participants were away for holiday, while the seaborne market was quiet. The 62% Fe Iron Ore Index was assessed at USD98.35/DMT CFR North China Friday, flat on the day.
The front month July TSI swap was flat on the day at USD95.35/DMT. As most of the iron ore products have imported profit at current levels, several traders said the premium which seaborne cargoes fetch would still be supported.
"Supply of July loading seaborne cargoes would be less compared with June, and this would support premium of July shipments," an international trader said. Limited choice for medium grade fines led to narrower spreads between the products.
A Singapore-based trader also said that supply of IOCJ fines has recovered, and the
tradeable premium would be around USD1/DMT for cargoes arriving in July. A Singapore-based trader said that supply of lumps is still tight, and not many lump cargoes were being offered in the spot market.
"Usage ratio of lump is still on the downtrend as we see more mills using pellet to replace it," an international trader said. The spot lump premium was assessed at 33 cents/DMT unit, flat day on day. The domestic concentrates market was relatively stable on week. Although imported iron ore fines fell this week, demand for domestic ores is still strong.
"Domestic concentrates is still the most cost-efficient raw material in blast furnaces, and suppliers have stronger bargaining power presently," a Hebei-based procurement source said.
A supplier claimed that mills are still trying to increase usage ratio of domestic ores, but supply is stable. The 66% Fe domestic concentrate was assessed at Yuan 875/DMT delivered to mills in Tangshan Friday, down Yuan 5/DMT on the week.
Report By: Mohammad Reza Barakchian
