Iron Ore Market in Brief: Seaborne prices passed USD110 for the first time since April 2014
Seaborne iron ore prices surged above USD110 per MT CFR on Thursday June 13th, highest level in last five years, as a result of the stable bullishness in the market.
Commodity | Price | Difference / MT |
MB 62% FE IRON ORE INDEX | USD 110.16 per tonne cfr Qingdao | +3.56 USD |
MB 62% FE PILBARA BLEND FINES INDEX | USD 108.96 per tonne cfr Qingdao | +3.56 USD |
MB 62% FE IRON ORE INDEX-LOW ALUMINA | USD 114.50 per tonne cfr Qingdao | +3.40 USD |
MB 58% FE PREMIUM INDEX | USD 101.18 per tonne cfr Qingdao | +2.97 USD |
MB 65% FE IRON ORE INDEX | USD 124.50 per tonne cfr Qingdao | +3.50 USD |
MB 62% FE CHINA PORT PRICE INDEX | 803 yuan per wet metric tonne | +7 Yuan |
KEY DRIVERS
China’s iron ore futures had been largely rangebound since Wednesday night, but experienced a sudden spike of as much as 15 Yuan (USD2.20) per ton in the last 10 minutes before the 3pm close on Thursday. Some market participants attributed the surge to an upswing in crude oil prices in the afternoon, as well as a report by local media that part of China’s steelmaking hub of Tangshan city has decided to stop electricity supplies to 86 local iron ore concentration plants. The report did not mention the reason for or the duration of any stoppage.
Meanwhile, news circulated among market participants that Brazilian miner Vale has said that it expects to fully restart production at the 30 million-tpy Brucutu mine in the next few days, having already resumed operations using the dry-stacking process instead of using tailings dams. The report also said Vale expects to bring back another 30 million tons of production through dry- stacking over the next six to 12 months at its Timbopeba, Vargem Grande, Pico and Alegria mines, and it is ramping up output at the S11D project in north Brazil.
However, the expected increase in iron ore supplies appeared to have only a limited impact on prices, although a trader in Shanghai said the situation needed to be closely watched. Spot iron ore transaction prices largely continued to rise at Chinese ports, while seaborne Australian cargoes were actively sought after. A joint shipment of Pilbara Blend fines and lump to be loaded in the second half of July traded at the July average of a 62% Fe index and its lump premium, plus a premium of USD3.71 per ton in the morning, up from a traded premium of USD3.50 per ton, sources said.
July-loading Capesize cargoes of Pilbara Blend fines traded at a premium of USD3.80-4.00 per ton in the afternoon, compared with a tradable level of about USD3.70 per ton a day earlier, and traded level around USD2.50 per ton at the end of last month. Some sellers with such Australian cargoes in hand were said to be holding back from making offers, in anticipation of rising prices or premiums. Daily MB 62% Fe Iron Ore Index rose USD3.56 per ton, while the daily MB 65% Fe Iron Ore Index increased USD3.50 per ton.
QUOTE OF THE DAY
“The sudden fear of inadequate shipments of PB materials in the coming months has pushed up premiums for them and also for other Australian products, while the premiums for Brazilian brands remained stable at already high levels, because in general Chinese mills are reducing [their] use of high-cost ore amid the profitability pressure,” a trader in Shanghai said.
Report By: Mohammad Reza Barakchian
