Iron ore prices exceed $200/mt CFR mark for first time since 2010

Thursday, 06 May 2021 17:45:07 (GMT+3)   |   Shanghai
       

Import iron ore prices in China have skyrocketed today, Thursday, May 6, after a week-long holiday, breaking the $200/mt CFR mark for the first time since 2010. The main reasons for the hike are the stronger rises in steel prices in China and increased political tensions between China and Australia, SteelOrbis has learned

Iron ore fines with 62 percent Fe content have surged by $15.05/mt today compared to the previous trading day, April 30, to $201.75/mt CFR. Over the past week, the price has gone up by $11.25/mt. This is the highest level of this grade of fines, since reporting started and it became an index in the Chinese market.

Brazilian iron ore with 65 percent Fe has seen a rise of $13/mt today from April 30 to $235/mt CFR, SteelOrbis has learned.

On May 6, the biggest deal was for 190,000 mt of 62 percent PB fines at the June index + $5.9/mt for shipment during May 30-June 8. Trading at Chinese ports has started to revive too, and more demand will be seen in the near future as customers will need to replenish stocks.

Among all the reasons for such a sharp increase in iron ore prices, the main one has been a surge in steel prices in the local market in China. Local rebar prices have added RMB 250/mt or $38.5/mt compared to the level before the holiday, while HRC prices have increased by RMB 185/mt or $28.5/mt, according to SteelOrbis’ data. These rises have been driven by high demand.

As of Thursday, May 6, rebar futures at the Shanghai Futures Exchange are standing at RMB 5,665/mt ($873/mt), increasing by RMB 213/mt ($37.7/mt) or 3.9 percent since April 29, while increasing by 4.56 percent compared to the previous trading day (April 30).

Another major reason for the uptrend in the iron ore market has been China’s announcement that it is "indefinitely" suspending all activity under the China-Australia Strategic Economic Dialogue. For now, there have been no any assessments of how this will impact iron ore supplies. "Specifically in relation to iron ore, at the moment there are relatively few alternatives available to China," Reuters reported Rio Tinto chairman Simon Thompson as saying. But in any case the hit on sentiment has been big.

During the given week, iron ore inventory at main ports in China has declined, exerting a positive impact on prices. Bullish sentiments have prevailed among big traders in the iron ore market, thus bolstering their offer prices. After the Labor Day holiday, iron ore futures have seen a sharp rise of 6.81 percent on the first trading day (May 6). The capacity utilization rates of blast furnaces in China except for northern China have been at peak levels amid high profitability on the steelmakers’ side. 

Iron ore futures prices at Dalian Commodity Exchange have moved up sharply by 6.81 percent today, coming to RMB 1184/mt ($182.4/mt) compared to April 30, while rising by RMB 57.5/mt ($8.9/mt) or 5.1 percent compared to April 29.

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

Product name

Iron
Content

Truck loaded price
(RMB/mt)

Change
(RMB/mt)

Price
($/mt)

Change
($/mt)

Newman iron ore lump

63/63.5

1,657

27

255.3

3.5

Yandi fines

58 / 59

1,089

4

167.8

0.2

PB Fines

62

1,325

24

204.2

3.1

PB iron ore lump

62/63

1,685

27

259.6

3.4

Brazil fines

63

1,400

42

215.7

5.9

Price includes VAT.  

Nationwide iron ore concentrate prices (66 percent Fe)

Place of origin

Market price RMB/mt, Incl. VAT)

Change
(RMB/mt)

Price$/mt)

Change
($/mt)

Tangshan

1,305

36

201

5

Beipiao

1,243

0

192

-1

Price includes VAT. 

$1 = RMB 6.4895


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