Iron ore posts small gains before holiday in China

Friday, 27 September 2019 16:36:07 (GMT+3)   |   Istanbul

Trading activity has not been at high levels in the Chinese iron ore market this week due to the approaching holiday and enough stocks. At the same time, suppliers have been increasing offer prices, as they have been expecting traditionally higher demand after the holiday on October 1-7. Prices for iron ore fines with 62 percent Fe content have risen by $0.9/mt today, September 27,  to $91.4/mt CFR, with this level still $0.3/mt below last Friday’s price. Brazilian iron ore fines with 65 percent Fe content have gained by $0.7/mt over the day to $98.2/mt CFR.   

There has been only one deal registered on the trading platform COREX for Pilbara lumps, with the price based on the November index. At the same time, trading at ports has increased on Friday, September 27.

Iron ore futures at Dalian Commodity Exchange have added RMB 10/mt ($1.4/mt) today, closing at RMB 642.5/mt ($91/mt), supporting spot prices.

This week steel production restrictions in China have been more tight due to preparations for the National Day holiday, but they have failed to support steel prices in the country as demand has been falling as well. Rebar futures at Shanghai Future Exchange have closed RMB 40/mt ($6/mt) lower than yesterday. If local demand stays weak after the holiday, it will put pressure on iron ore prices. “Iron ore is overpriced in current conditions in the global market,” a source said.

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