Iron ore prices surged on Thursday February 18 on support from strong steel prices and positive sentiment regarding steel inventory, sources told Fastmarkets.
*** Fastmarkets iron ore indices
۶۲% Fe fines, cfr Qingdao: $175.05 per tonne, up $8.17 per tonne
۶۲% Fe low-alumina fines, cfr Qingdao: $175.50 per tonne, up $8.25 per tonne
۵۸% Fe fines high-grade premium, cfr Qingdao: $160.22 per tonne, up $7.56 per tonne
۶۵% Fe Brazil-origin fines, cfr Qingdao: $198 per tonne, up $7.80 per tonne
۶۲% Fe fines, fot Qingdao: 1,176 yuan per wet metric tonne (implied 62% Fe China Port Price: $170 per dry tonne), up by 36 yuan per wmt
*** Key drivers
The most-traded May iron ore futures contract on the Dalian Commodity Exchange (DCE) opened high on the first trading day after the Chinese New Year holiday and maintained at an intra-day high, ending up by 5.6% from last Wednesday’s closing price of 1,071.50 yuan ($166) per tonne.
The iron ore forward-month swap contracts on the Singapore Exchange (SGX) are also on an uptrend. By 6:04pm Singapore time, the most-traded March contract had registered an increase of $2.59 per tonne compared with Wednesday’s settlement price of $166.91 per tonne.
The bullish performance in steel prices has supported iron ore prices in turn, sources told Fastmarkets.
A trading source in Shanghai said that construction work had restarted earlier this year following the Chinese New Year holiday considering that Covid-19 control measures were limiting travel, which supported demand for steel.
As a result, steel prices surged and pushed iron ore prices to increase, he added.
The increase in steel inventory over the holiday was lower than expected so sentiment in the steel and iron ore markets was positive and pushed prices up, a buyer source in northern China said.
Swaps on the SGX increased during the holiday as a result of futures on the DCE, also chasing that increment, and physical prices were boosted as well, he added.
*** Quote of the day
“Though mills and trading houses are actively buying iron ore again, trading volumes in the physical market have not fully recovered because some participants are in ‘wait-and-see’ mode after the quick surge in iron ore prices, ” a buyer source in southern China said.
*** Trades/offers/bids heard in the market
Vale, Globalore, 190,000 tonnes of 65% Fe Iron Ore Carajas fines, traded at $198 per tonne cfr China, bill of lading dated February 3.
Beijing Iron Ore Trading Center (Corex), 170,000 tonnes of 62% Fe Brazilian Blend fines, traded at $175.50 per tonne cfr China, laycan March 15-24.
Corex, 80,000 tonnes of 60.5% Fe Jimblebar Blend fines, traded at the March average of two 62% Fe indices plus a discount of $1.20 per tonne, laycan March 6-15.
Rio Tinto, Globalore, 170,000 tonnes of 62% Fe Pilbara Blend fines, traded at the April average of a 62% Fe index plus a premium of $5.65 per tonne, laycan March 25-April 3.
BHP, Globalore, 90,000 tonnes of 62% Fe Mining Area C fines, offered at $171.35 per tonne cfr China, laycan March 6-15.
**** Port prices
Pilbara Blend fines were traded at 1,153-1,165 yuan per wmt in Shandong province, Tangshan and Lianyungang city on Thursday, compared with 1,115 yuan per wmt last Tuesday.
The latest range is equivalent to about $167-168 per tonne in the seaborne market.
*** Dalian Commodity Exchange
The most-traded May iron ore futures contract closed at 1,131.50 yuan ($175) per tonne on Thursday, up by 60 yuan per tonne from last Wednesday’s close.
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