Chinese state-owned iron ore trading arm China Mineral Resources Group (CMRG) said on Friday, March 13, that Chinese steel mills may use BHP’s Jimblebar fines that are in Chinese port stocks a week, that were banned from being consumed and arriving in China since September last year. Traders are still not allowed to trade Jimblebar fines.
This move has come just after CMRG widened restrictions on BHP brands, as announced last Thursday, banning usage of Newman fines from the end of this week.
As a result, at the moment, Chinese steel producers are trying to transport as much BHP fines as possible to their assets, expecting the fight between CMRG and BHP to continue over long-term contract prices.
For now, a week-long easing of restrictions on Jimblebar fines has resulted in stabilization of iron ore spot prices and some cooling down of the market mood. For instance, the spot price of iron ore with 62 percent Fe is stable at $110/mt CFR, according to SteelOrbis, in line with Friday, but this price is still $4/mt higher week on week and as much as $8.45/mt above the late February level. Iron ore futures at Dalian Commodity Exchange have softened slightly by 0.74 percent to RMB 809/mt ($117.2/mt) today, March 16.
A few steel mills have commented to SteelOrbis that they do not expect any big iron ore price drop soon due to the lack of any big improvement in supply in the coming months, especially for iron ore with 62 percent Fe content, with more BHP iron ore brands frozen at ports.