Prices for iron ore fines with 62 percent Fe content have dropped by $2.3/mt today, Friday, December 20, to $90.8/mt CFR, while declining by $3.5/mt over the week, SteelOrbis has learned. Iron ore with 65 percent Fe is now priced at $101.8/mt CFR, $2.3/mt lower compared to Thursday. Lower trading volumes, concerns about iron ore consumption in the near future, and falling futures prices have contributed to the decline. Nevertheless, prices have remained above $90/mt CFR so far, which is “still a very high level”, according to sources.
There have been two deals for mixed cargoes of Pilbara fines and lumps at Corex, 170,000 mt each during the day. They have been closed based on the January index plus $0.3/mt and $0.25/mt.
Overall demand has been limited, according to market participants. Steelmakers in China have been required to implement anti-smog measures (some fresh short-term restrictions have been implemented in Tangshan recently), and so they have been cautious in concluding purchases of iron ore and willing to purchase as needed from stocks at ports. There has been a sale of 10,000 mt of lower grade iron ore fines (60.8 percent Fe content) at Tianjin Port at RMB 600/mt ($85.7/mt) delivered.
Most major miners have started to actively offer blended iron ore with medium and high Fe content at Chinese ports, trying to catch demand. Rio Tinto has offered blended fines (RTBF) with 62-63 percent Fe at Caofeidian and Jingtang ports, while Ningbo Zhoushan port and Vale will launch trading of an iron ore product called GF88. Moreover, this week Anglo American has opened a blending facility at Caofeidian port and started to offer high grade Anglo American Atlantic Fines (AAA) with about 65 percent Fe content, as SteelOrbis reported earlier.
However, Chinese steelmakers’ inventories of iron ore are at comparatively low levels, which will stimulate their purchases for iron ore to build up stocks ahead of the Chinese New Year holiday, and so prices are unlikely to fall sharply in the near future.
