The price of Brazilian iron ore with a 65 percent iron content is now $114 a metric ton (mt), CFR China, comparable with $115/mt one week ago, market insiders told SteelOrbis.
Sources said most recent data confirms a downward trend for iron ore demand in China, with the average operation rate of the country’s blast furnaces declining to 89.8 percent of capacity, and the pig iron daily production reduced by 15,400 mt to 2.44 million mt, as compared with the previous month.
Blast furnace grade pellets are exported at $132/mt, against $133/mt previously, showing the same premium over same-grade sinter feed fines.
Market sources said the premium for Brazilian 65 percent iron ore over Australian 62 percent ore fell to 8.3 percent from 9.6 percent on an iron-unit basis, the lowest rate in five months, now pointing to weaker demand for higher-grade materials, insiders said.
In the Brazilian domestic market, reference prices are now $81/mt for the ore and $99/mt for the pellets, against respectively $80/mt and $98/mt previously, on an ex-works basis, no taxes included.
Insiders told SteelOrbis prices were positively affected by lower Brazil-China freight rates, as the domestic price in Brazil is based on FOB quotations, having CFR China as the reference.
According to brokers Banchero Costa, the Tubarão-Qingdao freight rate, the benchmark route for Brazil-China iron ore shipments, is now $30.11/mt, up 60.6 percent year on year, mainly due to higher bunker fuel prices linked to the recent resurgence of conflict in the Middle East.
