Brazilian iron ore with 65 percent iron content is currently priced at $112 per metric ton (mt), CFR China, down from $115/mt last week, reflecting lower demand from Chinese integrated steel producers, as the country's blast furnace utilization rate fell 0.5 percentage points over one week to 89.5 percent, market sources told SteelOrbis.
The decrease also is partly linked to mandatory output cuts caused by environmental concerns in China.
Blast furnace-grade pellets are being exported at $130/mt, down from $133/mt previously, while keeping the same premium over same-grade sinter feed fines.
Market sources said Brazilian 65 percent iron ore now carries an 8.4 percent premium over Australian 62 percent iron ore, compared with 8.3 percent previously, still a relatively low level that points to weaker demand for higher-grade materials.
In Brazil's domestic market, reference prices now stand at $76/mt for iron ore and $94/mt for pellets, down from $82/mt and $100/mt, respectively, on an ex-works basis and excluding taxes.
These prices were also pressured by higher Brazil-China freight rates, since domestic market prices are based on FOB terms with CFR China used as the reference.
According to brokers Banchero Costa, the Tubarão-Qingdao freight rate, the benchmark for the Brazil-China iron ore route, stands at $32.72/mt, up 44 percent year on year, mainly reflecting higher bunker oil costs linked to the latest developments in the Middle East conflict.
