China Iron ore prices in both the futures and seaborne markets fell further on Monday October 26, due to a dip in liquidity while the market waits for a clear direction to emerge from China’s 14th five-year plan discussions.
*** Fastmarkets for China iron ore indices
۶۲% Fe fines, cfr Qingdao: $۱۱۴٫۶۳ per tonne, down $0.97 per tonne
۶۲% Fe low-alumina fines, cfr Qingdao: $۱۱۵٫۲۹ per tonne, down $0.41 per tonne
۵۸% Fe fines high-grade premium, cfr Qingdao: $۱۰۸٫۴۷ per tonne, down $0.62 per tonne
۶۵% Fe Brazil-origin fines, cfr Qingdao: $۱۲۹٫۴۰ per tonne, down $0.70 per tonne
۶۲% Fe fines, fot Qingdao: ۸۷۱ yuan per wet metric tonne (implied 62% Fe China Port Price: $۱۲۰٫۶۹ per dry tonne), down by 12 yuan per wmt
*** Key drivers for China irone ore
Sources said trading activity in the physical market had been limited because the market was focusing on the outcome of the Chinese government’s discussions on the 14th five-year plan for economic and social development, which takes place on October 26-29.
A trading source in Shanghai said the market was quiet, with only a few active buyers and with weak sentiment continuing, while most participants had halted trading in anticipation of a clearer direction for the iron ore market once the talks are concluded.
Apart from the hiatus caused by the five-year plan discussions, bearish fundamentals were still depressing prices, sources said.
And a trading source in southern China said that, although the meeting had attracted market’s attention, the weak sentiment caused by high port inventories, coupled with sintering restrictions in Tangshan and concerns about future iron ore supplies, were the key factors dragging down prices.
The most-traded January iron ore futures contract on the Dalian Commodity Exchange (DCE) continued its steady decline through the day on Monday, ending with a drop of 1.4% compared with Friday’s closing price.
Meanwhile, the most-liquid November iron ore swaps contract on the Singapore Exchange (SGX) fell by more than $۱ per tonne in the afternoon session, but then rebounded after the DCE closed at 3pm. By 6pm, it had fallen by $۰٫۴۱ to $112.66 per tonne from last Friday’s settlement price of $113.07 per tonne.
*** Quote of the day
“Recent trading volumes of iron ore swaps have been low, so [it’s not easy to tell if] the trend is for a bullish or bearish outlook, which implies that market participants could be waiting for China’s five-year plan before deciding on their positions,” a broker source in Singapore said.
*** Trades/offers/bids heard in the market
Rio Tinto, Beijing Iron Ore Trading Center (Corex), 170,000 tonnes of 61% Fe Pilbara Blend fines, traded at $111.95 per tonne cfr China, laycan November 25-December 4.
Corex, 90,000 tonnes of 65% Fe Iron Ore Carajas fines, offered at $130 per tonne cfr China, bill of lading dated October 23.
Corex, 170,000 tonnes of 62% Fe Pilbara Blend fines, offered at the December average of a 62% Fe index plus a premium of $3.95 per tonne, laycan November 25-December 4 (bid made at the December average of a 62% Fe index plus a premium of $3 per tonne).
*** Port prices
Pilbara Blend fines were traded at 840-850 yuan per wmt in Qingdao and Lianyungang city on Monday, compared with 855-868 yuan per wmt on last Friday.
The latest range is equivalent to about $116-118 per tonne in the seaborne market.
*** Dalian Commodity Exchange
The most-traded January iron ore futures contract closed at 760.50 yuan ($114) per tonne on Monday, down by 11 yuan per tonne from last Friday’s close.
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