The price of ex-Brazil 65 percent iron sinter feed fines in the Chinese spot market is now $164/mt, against $172/mt three days ago, CFR China conditions.
The price of the Brazilian blast furnace grade pellets, in a similar trend, declined from $217/mt to $200/mt, under the same conditions.
The deeper reduction of the pellet price reflects a lower premium of the product in relation to the sinter feed fines, due to persistent thin liquidity of higher quality products. The premium of the high-grade ore over the Australian 62 percent ore grade, when considering their iron units, is now 7.8 percent, against 6.8 percent three days ago.
Such premium, a measure for the search of productivity in blast furnaces, was not relevant until 2016, having reached a peak of 37 percent in July 2018 and remained high until December 2019, a period when productivity was the focus of steel producers.
In the Brazilian domestic market, the prices are estimated now at $122/mt for the ore and $158/mt for the pellets, ex-works, no taxes included, against $128/mt and $173/mt, respectively, late last week.
Preliminary numbers are pointing to a combined exports of iron ore and pellets from Brazil in August of 34.84 million mt, against 31.73 million mt in July, representing the highest volume in the year. According to sources, this is an indication that lower iron ore prices are paving the way for record volumes traded in the seaborne market.