Iron ore prices at highest level since March, futures react to Chinese government intervention

Import iron ore prices in China have moved on an uptrend today, Thursday, November 16, and also have increased over the past week again, exceeding $130/mt CFR, last seen in March this year. However, today iron ore futures prices have declined by 1.53 percent, reacting to the China’s government control measures aimed at easing the speculative rises in iron ore futures prices.    

Spot iron ore fines with 62 percent Fe content have risen by $0.5/mt today to $132.35/mt CFR. This level is $4.45/mt above that seen one week ago. Brazilian iron ore with 65 percent Fe has indicated an increase of $0.7/mt on November 16 to $142.9/mt CFR, while up $4.65/mt week on week, SteelOrbis has learned.  

11 deals for a total of 149,000 mt have been concluded at the Corex platform, including 90,000 mt of 62.3 percent Newman fines being traded at $132.5/mt CFR for laycan during December 1-10.   

During the given week, iron ore prices have moved up first, while futures prices have indicated a decline of 1.53 percent on November 16 as the Price Division of China’s National Development and Reform Commission (NDRC) has sent staff to the DCE to jointly study the strengthening of supervision of the iron ore market, which has exerted a negative impact on market sentiments. Inventory of iron ore at ports has decreased to relatively low levels, bolstering prices to a certain degree. At the same time, finished steel prices have indicated bigger rises than import iron ore prices, also positively affecting the market.  

Some steelmakers have started to resume production activities with their blast furnaces, which will boost the demand for iron ore in the near future. However, market players are worried about future finished steel prices being impacted by increasing supply. So, it is expected that import iron ore prices may fluctuate within a limited range in the coming week, but with a negative bias.   

Iron ore futures prices at Dalian Commodity Exchange have declined by RMB 26/mt ($3.6/mt) to RMB 965/mt ($134.6/mt) compared to November 9, while decreasing by 1.53 percent compared to the previous trading day (November 15).  

As of Thursday, November 16, rebar futures at the Shanghai Futures Exchange are standing at RMB 3,972/mt ($554/mt), increasing by RMB 119/mt ($16.6/mt) or up 3.1 percent since November 9, while rising by 1.25 percent compared to the previous trading day (November 15).  

Imported iron ore prices in China (week-on-week basis)  

Price includes VAT.    

Nationwide iron ore concentrate prices (66 percent Fe)  

Price includes VAT.   

$1 = RMB 7.1724