Iron ore down slightly despite stronger demand for high grade fines, lumps

Thursday, 05 December 2019 17:24:36 (GMT+3)   |   Shanghai
       

Iron ore prices for China have edged down slightly, today, December 5 due to weaker futures prices and some expectations of a possible consumption slowdown. The decline has followed the price increase seen yesterday, market sources said, adding iron ore prices have even increased slightly in the week-on-week comparison.

Prices for iron ore fines with 62 percent Fe content have lost $0.3/mt today to $88.6/mt CFR, while Brazilian iron ore with 65 percent Fe has declined $0.5/mt coming to $100.5/mt CFR, SteelOrbis has learned.

On Thursday, about 170,000 mt of Brazilian blended fines with 62 percent Fe content have been traded at $88.25/mt CFR, while two lots for 140,000 mt each of Brazilian Carajas fines with 65 percent Fe have changed hands at $105/mt CFR. Chinese customers have been interested in purchases of Brazilian iron ore, trying to book needed volumes for delivery in the first quarter. According to Vale’s announcement this week, its iron ore production and sales are expected to range at 68-73 million mt in the first quarter of 2020, much lower than the 83-88 million mt projected for the fourth quarter.

Moreover, demand for lumps has been at higher levels. On December 5, 70,000 mt of Pilbara lumps have been sold with a premium of $0.264/mt. A day earlier, about 80,000 mt of Newman lumps were traded at a slightly higher premium of $0.265/mt.

Yesterday, on December 4, demand improved with more than 600,000 mt sold at trading platforms. The still good performance of the Chinese steel market has provided some support for iron ore prices this week as steelmakers have been active in concluding deals. Some iron ore traders started to build up stock, which also bolstered iron ore demand.

However, lower futures and some weakening of sentiments have put pressure on the iron ore market on Thursday. Iron ore futures prices at Dalian Commodity Exchange have lost RMB 3.5/mt ($0.5/mt) or 0.53 percent over the day, coming to RMB 654.5/mt ($92.8/mt), signaling a bearish sentiment starting to affect the near-term prospects for the iron ore market. Steel enterprises in some cities in Hebei Province are required to implement level II anti-smog measures for three days starting from December 7, which may negatively affect steel output and thereby exert a negative impact on iron ore market.

Rebar futures at Shanghai Future Exchange have decreased by RMB 23/mt ($3.3/mt) or 0.64 percent on Thursday compared to the previous trading day, while lost 0.9 percent compared to that recorded on November 28.

Imported iron ore prices (week-on-week basis)

Product Name

Port

Iron
Content

Place of origin

Truck loaded price
(RMB/mt)

Change
(RMB/mt)

Price
($/mt)

Change
($/mt)

Newman iron ore lump

Qingdao

63/63.5

Australia

823

10

116.7

1.0

Brazil fines

63

Brazil

671

6

95.2

0.5

Yandi fines

58 / 59

Australia

581

6

82.4

0.6

PB Fines

62

Australia

665

15

94.3

1.8

PB iron ore lump

62/63

Australia

818

10

116.0

1.0

Note:Price Includes VAT  

Nationwide iron ore concentrate prices

Product Name

Specification

Place of Origin

Market price (RMB/mt, Incl. VAT)

Change
(RMB/mt)

Price($/mt)

Change
($/mt)

Iron ore concentrate

damp base (iron content: 66 percent)

Tangshan

733

0

104

0

Iron ore concentrate

damp base (iron content: 66 percent)

Beipiao

655

-12

93

-2

Note:Price Includes VAT 

$1 = RMB 7.052


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