Iron ore prices in China have increased on Monday, September 9 amid higher futures, steel tags following the announcement of the People’s Bank of China (PBC) about the cut of the required reserve ratio (RRR) for financial institutions by 0.5 percentage points on September 16, 2019. As a result, iron ore prices for fines with 62 percent Fe content have jumped by $3.8/mt since Friday to $92/mt CFR, while Brazilian 65 percent fines have added $3/mt, reaching $99/mt CFR.
Overall market activity has increased. A deal for 90,000 mt of Mac fines has been done at $89.95/mt CFR for September 21-30 shipment. About 170,000 mt of Brazilian fines with Fe content also 62 percent have changed hands at $90.3/mt CFR, shipment during October 5-14.
Market sources said that price increase in early September has been quite expected on more trades earlier at the Dalian Commodity Exchange. Moreover, on September 9, January iron ore futures have been closed by RMB 20/mt ($3/mt) higher than on Friday at RMB 655.5/mt ($92.6/mt).
Steel prices have been moving up today as well amid some slight demand improvement and better expectation for September following RRR cut. Average billet prices in China have added RMB 25/mt ($3.5/mt) over the day, according to SteelOrbis.
“It is still unknown what will happen in October, but this month not the strictest output limitations in China and expected less iron ore supply due to maintenances in Australia will give some support,” a Chinese trader told SteelOrbis.
