Iron ore price boosted by more active trading in China, outlook not bright

Iron ore prices have edged up slightly today, April 2 compared to the previous day following more deals being concluded by Chinese customers. Iron ore futures prices have also rebounded, giving some support. However, the situation in the steel market has remained complicated with physical prices still going down, which may put pressure on the raw material in the near future. Iron ore fines with 62 percent Fe content have edged up by $1.3/mt today to $82.9/mt CFR, while Brazilian iron ore with 65 percent Fe has gained $2.4/mt to $99.9/mt CFR, SteelOrbis has learned.

In total, 780,000 mt of iron ore from Australia have been traded at trading platforms on April 2, excluding volumes sold from Chinese ports. Deals are in the table below.

Moreover, at ports one deal for 5,000 mt of 56.64 percent Fe FMG fines has been concluded at RMB 515/mt ($72.5/mt), Jingtang port, while a contract for 20,000 mt of 60.02 percent Fe Mac fines has been done at RMB 635/mt ($89.4/mt), Tianjin port.

During the given week, import iron ore prices have been negatively affected due to the expectations for reductions in steel outputs in the global market. However, blast furnaces in China have maintained their normal production capacity utilization rate and more steelmakers in the country have been increasing production following the end of the winter season restrictions.

Market players have stated that, if iron ore supplies supposed to be shipped to other countries in Europe, Japan and South Korea are redirected to China, iron ore prices will edge down due to ample supply. But more time is needed to evaluate the supply situation, sources said.

Iron ore futures prices at Dalian Commodity Exchange have edged up by 2.85 percent today, coming to RMB 577.5/mt ($81.3/mt) compared to April 1, while they have lost 12.8 percent compared to March 26 due to the shift of the main contract to i2009 from i2005.

Rebar futures at Shanghai Future Exchange have improved today following the sharp drop yesterday: however, the situation in the long steel segment has remained challenging. Rebar futures have decreased by RMB 112/mt ($15.8/mt) or 3.3 percent to RMB 3,229/mt ($454.8/mt) as of Thursday compared to March 26, while rising by 1.48 percent compared to the previous trading day. According to SteelOrbis’ data, average spot rebar prices have lost another RMB 20/mt ($2.8/mt) today.

Imported iron ore prices in Chinese ports (week-on-week basis)

Price Includes VAT.  

Nationwide iron ore concentrate prices (66 percent Fe)

Price Includes VAT. 

$1 = RMB 7.0995