The price of Brazilian high-grade iron ore, with 65 percent iron content, is now $108/mt, compared to $111/mt on May 19, CFR China.
Sources indicate that the decline is mainly due to the ongoing weakness in the Chinese real estate market and the subsequent reduced demand for steel products, along with decreased steel demand from other sectors as well.
The export price of blast furnace grade pellets has decreased to $122/mt from $125/mt previously, CFR China, maintaining the same premium relative to sinter feed fines.
The premium of Brazilian high-grade ore, 65 percent iron ore, in relation to Australian 62 percent iron ore, based on their iron units, is now 6.7 percent, up from 6.0 percent previously, still reflecting a low level of interest from integrated steel producers for higher productivity and lower emissions of premium ores when processed in blast furnaces.
This low interest prompted the Brazilian miner Vale to introduce a lower grade ore, which requires less production expenses at the mine and allows for the possibility of selling it at lower prices in the Chinese market.
In the Brazilian domestic market, reference prices are now $86/mt for the ore and $99/mt for pellets, down respectively from $90/mt and $103/mt previously, ex-works, no taxes included.
These prices were also affected by higher Brazil-China freight rates, as the domestic price in Brazil is based on FOB conditions, having CFR China as reference.