Futures fall weighs on iron ore prices in China, but higher grade 65% Fe fines up

Monday, 11 January 2021 17:25:27 (GMT+3)   |   Istanbul
       

Prices for imported iron ore have been under pressure today, Monday, January 11, as steel and raw material futures have dropped today, showing weaker sentiment in the Chinese market. Nevertheless, prices for higher grade ore with 65 percent Fe have increased amid tight supply.

The price level for iron ore fines with 62 percent Fe content has lost $0.95/mt since last Friday, dropping to $170.55/mt CFR.

At the same time, Brazilian iron ore with 65 percent Fe has gone up by $3.3/mt on Monday to $193.7/mt CFR with a deal for 190,000 mt of this iron ore traded during the day at this price level. Most sources said that the lower availability of higher grade ore in China has resulted in a higher price for it, while overall sentiment has been weaker in the raw material market today, SteelOrbis has learned.

May iron ore futures at Dalian Commodity Exchange have declined by RMB 18/mt ($2.8/mt) or 1.8 percent on Monday to RMB 1,046/mt.

“Steel futures dropped today. Demand [for steel in China] could be under pressure in the near term,” a trader said, and this situation could also impact demand for iron ore in China. On January 11, rebar futures closed at RMB 4,348/mt ($671/mt) at Shanghai Futures Exchange, down by 2.79 percent compared to the previous trading day (January 8).  HRC futures have plunged by RMB 196/mt ($30.3/mt) or 4.2 percent to RMB 4,458/mt ($689/mt). Lower demand for construction steel in northern China due to cold weather and the increasing number of new infection cases in China’s top steel producing centre, Hebei Province, have resulted in such a sharp drop in steel futures prices. Mainland China reported about 103 new coronavirus cases on January 10, the biggest daily increase in over five months.


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