Iron ore price hovers near $130/mt CFR after big fall from early Jan

Import iron ore prices in China have seen increases today, Thursday, January 18, though they are still below the levels seen last week, indicating that the drop in the market witnessed late last week was reflecting the market fundamentals and now spot prices will hover near the $130/mt CFR mark, around $10/mt below the levels seen in early January.

Iron ore fines with 62 percent Fe content have increased by $3.35/mt today to $130.6/mt CFR. This level is $5.4/mt below that seen one week ago. Brazilian iron ore with 65 percent Fe has indicated a rise of $3.1/mt on January 18 to $142.25/mt CFR, while down $4.55/mt week on week, SteelOrbis has learned. The improvement today has been sentiment-based. According to local media, China's top economic planner the National Development and Reform Commission (NDRC) said on Thursday that it supports further measures to boost the development of the private sector and the real economy.

Seven deals for a total of 551,500 mt of import iron ore have been concluded on January 18 at Corex, including 240,000 mt of 61.9 percent Newman unscreened lump ore at the February 62 percent index -$4.3/mt, for shipment during January 20-29, and 170,000 mt of 62 percent PB fines transacted at the March 62 percent index +$2.7/mt, for shipment during March 1-10. In general, after the drop in prices, trading has slightly improved.

Import iron ore prices have moved down in the given week, though indicating big rises on January 18. Currently, rebar and import iron ore prices are at relatively high levels, so traders have been unwilling to build up stocks for the winter season. Steelmakers’ profitability has improved slightly amid decreasing coke and iron ore prices, while still at the worst level of the past few years. Market players think steelmakers’ production activities will be negatively affected, which will weaken the demand for iron ore. The iron ore volume arriving at ports will decrease in the near future, which may provide some support for prices. It is thought that import iron ore prices may fluctuate within a limited range in the coming week.

Iron ore futures prices at Dalian Commodity Exchange have risen by 0.8 percent, standing at RMB 948.5/mt ($133.4/mt) compared to the previous trading day (January 17), while decreasing by RMB 28/mt ($3.9/mt) compared to January 11.

As of Thursday, January 18, rebar futures at the Shanghai Futures Exchange are standing at RMB 3,913/mt ($550/mt), decreasing by RMB 13/mt ($1.8/mt) or down 0.33 percent since January 11, while rising by 0.49 percent compared to the previous trading day (January 17).

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

Price includes VAT.

Nationwide iron ore concentrate prices (66 percent Fe)

Price includes VAT.

$1 = RMB 7.1174