The price for Brazilian high-grade iron ore, with 65 percent iron content, is now $118/mt, against $115/mt one week ago, CFR China.
Despite the increase of global iron ore shipments to China last week, the effective arrivals at Chinese ports have declined due to weather related problems, positively affecting prices.
According to sources, the Chinese demand for iron ore is showing resilience and supporting prices in the short term.
In the specific case of the high-grade ore, its shortage is also positively affecting the price, as the Brazilian miner, Vale, maintains its police of focusing on lower grade ores to serve Asian markets, reducing the availability of the high grade ore.
The export price of blast furnace grade pellets is now $131/mt, against $128/mt last week, CFR China, maintaining the same premium relative to sinter feed fines.
The premium for Brazilian high-grade ore, containing 65 percent iron, relative to Australian 62 percent iron ore, based on their iron units, increased to 12.0 percent from 10.1 percent previously, now the highest figure in three years, reflecting not only its lower availability, but also higher interest of integrated producers for the performance of premium ores when processed in blast furnaces.
In the Brazilian domestic market, reference prices are now $90/mt for the ore and $103/mt for pellets, up from $89/mt and $102/mt, respectively, ex-works and excluding taxes. These prices have been negatively affected by higher Brazil-China freight rates, as the domestic price in Brazil is based on the FOB quotation using CFR China as the reference.