Iron ore prices rose on Friday May 28 amid strong semi-finished and finished steel prices, driven by firmer demand from end users, sources told Fastmarkets.
Fastmarkets iron ore indices ***
۶۲% Fe fines, cfr Qingdao: $۱۹۰٫۵۱ per tonne, up $0.78 per tonne
۶۲% Fe low-alumina fines, cfr Qingdao: $۱۹۲٫۶۷ per tonne, up $1.77 per tonne
۵۸% Fe fines high-grade premium, cfr Qingdao: $۱۶۲٫۸۰ per tonne, up $0.42 per tonne
۶۵% Fe Brazil-origin fines, cfr Qingdao: $۲۲۴٫۹۰ per tonne, up $1.30 per tonne
۶۲% Fe fines, fot Qingdao: ۱,۳۱۴ yuan per wet metric tonne (implied 62% Fe China Port Price: $۱۹۲٫۶۱ per dry tonne), unchanged
۶۳% Fe Australia-origin lump ore premium, cfr Qingdao: $۰٫۵۵۵۰ per dry metric tonne unit (dmtu), up $0.0650 per dmtu.
Key drivers ***
The most-traded September iron ore futures contract on the Dalian Commodity Exchange (DCE) trended largely flat for most of the Friday session before a slight rebound towards the close saw it end the day up 1.6% from Thursday’s closing price of 1,046.50 yuan ($164) per tonne.
Iron ore forward-month swaps contracts on the Singapore Exchange (SGX) traded largely sideways before trending up in the late afternoon and by 6:29pm Singapore time the most-traded June contract was up $1.51 per tonne compared with last Thursday’s settlement price of $183.04 per tonne.
Both rebar and hot-rolled coil prices have risen in China’s domestic market because of stronger demand, indirectly boosting iron ore prices, according to market sources.
Some traders said the latest iron ore price rise was only likely to be brief, however.
The rainy season is approaching in southern China and it is expected to weaken demand for steel, a buyer source in southern China told Fastmarkets.
The same source added that steel inventories were still at a high levels, so the prices were likely to fall and that would probably drag down iron ore prices as well.
Sentiment remains weak in the iron ore market because most traders believe demand for the raw material might be outweighed by supplies because of increasing shipments from Brazil.
Quote of the day ***
“Prices for Iron Ore Carajas fines (IOCJ) are likely to soften soon because of higher shipment from Brazil. It is likely there will be a higher number of cargoes coming from Brazil to China until August or September,” a buyer source in Singapore said.
Trades/offers/bids heard in the market ***
BHP, Globalore, 90,000 tonnes of 62% Fe Mining Area C fines, traded at $182.50 per tonne cfr China, July arrival.
Beijing Iron Ore Trading Center, 170,000 tonnes of 62% Fe Pilbara Blend fines, offered at the July average of a 62% Fe index plus a premium of $8.85 per tonne, laycan June 27-July 6.
Globalore, 70,000 tonnes of 62.5% Fe Pilbara Blend lump, bid made at the June average of a 62% Fe index plus a lump premium of $0.5700 per dry metric tonne unit, latest arrival date on June 30.
Vale, tender, 170,000 tonnes of 64.28% Fe Iron Ore Carajas fines, bill of lading dated May 25.
Market participant indications for MBIOI62 Index (62%Fe basis)
Pilbara Blend fines: $185.80-193.50 per tonne cfr China;
Brazilian Blend fines: $189.90- 194 per tonne cfr China;
Newman fines: $190.40-193.60 per tonne cfr China;
Jimblebar fines: $178-185.40 per tonne cfr China;
Market participant indications for MBIOI65 Index (65%Fe basis)
Iron Ore Carajas: $223-227 per tonne cfr China;
Port prices ***
Pilbara Blend fines were traded at 1,300-1,340 yuan per wmt in Shandong province and Tianjin city on Friday, compared with 1,278-1,300 yuan per wmt on Thursday.
The latest range is equivalent to about $190-196 per tonne in the seaborne market.
Dalian Commodity Exchange ***
The most-traded September iron ore futures contract closed at 1,063 yuan ($167) per tonne on Friday, up by 16.50 yuan per tonne from Thursday’s closing price.
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