The price of ex-Brazil 65 percent iron sinter feed fines is $252/mt today, against $255/mt earlier this week, CFR China conditions. Over the past week, the price has maintained an oscillating pattern at high levels, reaching $249/mt and $251/mt during the period.
Under the same conditions, the price of blast furnace grade pellets has reached $317/mt, against $320/mt earlier this week.
According to sources, the price shifting at high historical levels for iron ore reflects doubts concerning supply problems and demand from steel industries in China. On the supply side, although an expansion of iron ore production is planned in Brazil, the country will face an energy crisis due to an unprecedent dry season that is bringing hydroelectric plant dams to the lowest water levels ever registered. Although the country’s miners in most cases have their own energy supplies, iron ore production could be indirectly affected by ancillary activities, as Brazil has more than 65 percent of its electricity produced in hydroelectric plants.
On the demand side, a tighter control of steel production in China could negatively affect iron ore prices, but the effectiveness of the announced measures is a permanent source of doubts among market players.
Preliminary figures from the Brazilian customs remain pointing to a reduction in June from the 26.66 million mt of combined iron ore and pellets exported from the country in May.