The premium for Brazilian high-grade ore of 65 percent iron contents, in relation to the 62 percent Australian ore, when comparing their iron units, has reached 19.3 percent, the highest number since December 2018, reflecting an increased demand for the high productivity of the ore in blast furnaces, due chiefly to low consumption of costly coal and coke when the high-grade ore is processed.
However, the price of high-grade ore declined this week, hitting $128/mt against $144/mt earlier this week, while the price of the blast furnace grade pellets is now $161/mt, from $177/mt previously, both CFR China conditions.
In the Brazilian domestic market, the prices are estimated now at $88/mt for the ore and $121/mt for the pellets, ex-works, no taxes included, against $101/mt and $134/mt previously, respectively.
According to sources, today’s declining prices for all ore grades reflect announcements by more cities in northern China implementing steel production cuts during winter. In a wider picture, poor economic data from China continues to raise fears of a slowdown of the country’s economy and by extent of the global economic recovery.
Preliminary numbers in Brazil remain pointing to a 10 percent reduction in September from the 31.69 million mt of combined iron ore and pellets exported from the country in August.