According to Platts, it was assessed the 62% Fe Iron Ore Index at $75.95/dry MT CFR North China Friday, up $1.20/DMT from Thursday. The seaborne iron ore market strengthened Friday supported by expectations that steel prices will go up further after Lunar New Year holidays. The lump premium market rose Friday.
Offers for Pilbara Blend fines cargoes were received at premiums of $1.80-$2/DMT today, for cargoes loading in early February. As there was not much buildup of steel stocks during the off-season in China, market participants expect steel prices could go up in the spring.
Platts iron ore 62% Fe iron ore port stock index, or IOPEX North China, was assessed at Yuan 579/WMT FOT Friday, up Yuan 7/ WMT from Thursday, or at $76.36/DMT on an import parity basis.
Platts assessed the 66% Fe domestic concentrate at Yuan 790/DMT delivered to mills in Tangshan Friday, up Yuan 15/DMT on the week.
“Steel producers are optimistic about steel demand, and many end-users are buying iron ore cargoes from the ports to increase inventory levels,” a Chinese trader said.
Concentrate, port stock prices up Domestic concentrates prices also went up this week following a stronger imported iron ore market. It was also assessed the spot lump premium at 38.30 cents/dry MT unit on Friday, up 3.3 cents/DMTu from Thursday.
However, an international trader said that current steel margins did not support lump demand. The 66% Fe domestic concentrates cargoes were heard traded at a range of Yuan 780-810/DMT, for delivery to mills in Tangshan.
IOPEX East China was assessed at Yuan 573/WMT FOT Friday, up Yuan 10/WMT from Thursday, or at $75.59/DMT on an import parity basis. Inventory for Newman Blend lump was tight at the ports, which supported strong trading levels in the seaborne market, sources said.
In addition, the Chinese government injected additional capital into financial markets this week, and the warming of US-China trade ties provided further support to market confidence, an international trader said. Prices for port stocks rose Friday following a strong futures market with traded levels incrementally rising throughout the day.
“Mills can only lower lump usage in the future, and it is possible to replace lump usage by using more pellets,” the trader said. The supply uncertainty supported the premium in the short-term, a Beijing based trader said. Traded prices for medium grade fines at the ports moved higher throughout the day.
Although supply had increased this week due to ease in environmental restrictions in January, mills were also restocking more of domestic concentrates for winter production, sources said.
Report By: Mehrdad Najafi