Iron ore physical prices rose on Wednesday June 2, while low-grade fines increased on buying interest from Chinese steel mills, sources said.
Fastmarkets iron ore indices ***
۶۲% Fe fines, cfr Qingdao: $209.19 per tonne, up $0.52 per tonne
۶۲% Fe low-alumina fines, cfr Qingdao: $211.50 per tonne, up $0.46 per tonne
۵۸% Fe fines high-grade premium, cfr Qingdao: $182.30 per tonne, up $1.30 per tonne
۶۵% Fe Brazil-origin fines, cfr Qingdao: $240.00 per tonne, up $0.10 per tonne
۶۳% Fe Australia-origin lump ore premium, cfr Qingdao: $0.4850 per dry metric tonne unit (dmtu), unchanged
۶۲% Fe fines, fot Qingdao: 1,447 yuan per wet metric tonne (implied 62% Fe China Port Price: $212.69 per dry tonne), up by 16 yuan per wmt
Key drivers ***
The most-traded September iron ore futures contract on the Dalian Commodity Exchange (DCE) fluctuated around the same level as the previous day’s close on Wednesday before ending the day down by 0.1% from Tuesday’s close price of 1,169.50 yuan ($183) per tonne.
The most-traded July iron ore forward-month swap contract on the Singapore Exchange (SGX) gained slightly. By 6:13pm Singapore time, it had registered an increase of $0.09 per tonne compared with Tuesday’s settlement price of $198.16 per tonne.
During China’s State Council policy briefing on June 1, the State Administration for Market Regulation put emphasis on strengthening supervision in commodity markets, monitoring price trends in the iron ore, coke and crude oil markets, and issuing weekly analysis reports.
Both China’s State Council and the China Iron & Steel Association frequently called for stable commodity prices in May.
This message on market regulation amid volatile iron ore prices could depress the futures market sentiment, a source in Singapore said.
In the physical market, Chinese mill demand for iron ore slowed amid weakening steel margins while trading houses were more active in buying. Lower steel margins are also attracting demand for low-grade fines and low-grade lump, the source said.
There was increased stability in the iron ore market on Wednesday, market participants had likely adopted a ‘wait-and-see’ approach based on earlier market chatter of restrictions on emissions easing in Tangshan, an analyst in Shanghai said.
Nothing has been confirmed so far and the Tangshan steel mills that the emissions restrictions are affecting have not received any official documents, sources said.
Quote of the day ***
“Steel margins have fallen so demand for low-grade iron ore fines has risen because the steel mills in China don’t want to spend on mid-grade fines. Low-grade lump is performing better than mid-grade Newman Blend lump or Pilbara Blend lump at Chinese ports because it costs less,” a trading source in Shanghai said.
Trades/offers/bids heard in the market
BHP, Globalore, 90,000 tonnes of 62% Fe Mining Area C fines, traded at $202.60 per tonne cfr China, July arrival.
Beijing Iron Ore Trading Center (Corex), 170,000 tonnes of 62% Fe Pilbara Blend fines, traded at the July average of a 62% Fe index plus a premium of $9.30 per tonne, laycan June 28-July 7.
Corex, 170,000 tonnes of 62% Fe Pilbara Blend fines, offered at the July average of a 62% Fe index plus a premium of $9.65 per tonne, laycan June 29-July 8.
Corex, 170,000 tonnes of 65% Fe Iron Ore Carajas fines, bid made at $238.50 per tonne cfr China, July arrival.
Globalore, 170,000 tonnes of 65% Fe Iron Ore Carajas fines, bid made at $236 per tonne cfr China, bill of lading between May 20-June 10. Vale, tender, 170,000 tonnes of 64.65% Fe Iron Ore Carajas fines, bill of lading dated May 31.
Market participants’ indications for:
Fastmarkets index for iron ore 62% Fe fines
Pilbara Blend fines: $205.90-$210.00 per tonne cfr China
Brazilian Blend fines: $207.90-$214.00 per tonne cfr China
Newman fines: $205.90-$208.00 per tonne cfr China
Jimblebar fines: $196.20-$199.90 per tonne cfr China
Port prices ***
Pilbara Blend fines were traded at 1,420-1,430 yuan per wmt in Shandong province and Tangshan city on Wednesday, compared to 1,400-1,430 yuan per wmt on Tuesday.
The latest range is equivalent to $209-210 per tonne in the seaborne market.
Dalian Commodity Exchange
The most-traded September iron ore futures contract closed at 1,168.50 yuan ($183) per tonne on Wednesday, down 1 yuan per tonne from Tuesday’s close price of 1,169.50 yuan per tonne.
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