Iron ore prices hit new high amid steel price trend, despite weaker consumption

Import iron ore prices in China have moved up today, Thursday, March 4, supported by higher futures prices and increasing trends in China's steel markets. Meanwhile, prices have seen further rises compared to last week even despite the recently announced steel output and transportation restrictions in Tangshan.

Iron ore fines with 62 percent Fe content have moved up by $1.2/mt compared to March 3, to $177.6/mt CFR. Moreover, this level is $3.6/mt above that seen a week ago on February 25.

Brazilian iron ore with 65 percent Fe has risen by $3.2/mt today to as high as $202.9/mt CFR, up $4.9/mt week on week, SteelOrbis has learned. This level has been reflected in today’s deal at the GlobalOre platform for 190,000 mt of iron ore fines with 65 percent Fe.

Also, turning to the ports, on March 4, a deal for 28,000 mt of 56.6 percent fines was at RMB 990.5/mt ($153/mt) CFR, at Caofeidian port. In addition, about 20,000 mt of PB fines were traded at RMB 1,188/mt ($183.5/mt) at Qingdao port.

During the given week, the rising trend in finished steel prices resulted in better profitability on the steelmakers’ side, which exerted a positive impact on iron ore prices. Steel prices in China have been supported by the news of steel production cuts in Tangshan, aimed at improving environmental conditions. The Tangshan authorities announced that production at seven blast furnaces should be stopped as of March 10. This will result in losses of a minimum of 5,000 mt of pig iron output daily, while transportation by tracks will be cut by 50 percent.

This will definitely shrink the demand for import iron ore, but it has not impacted prices for now. Some sources connect this with the maintenances at ports in Australia and Brazil, which reduced the shipments and supported prices to some extent. It is thought that import iron ore prices will be under pressure in the coming week.

Iron ore futures prices at Dalian Commodity Exchange have moved up by 3.85 percent today, coming to RMB 1174.5/mt ($181.4/mt) compared to February 25, while rising by 1.95 percent compared to March 3.

As of Thursday, March 4, rebar futures at the Shanghai Futures Exchange are standing at RMB 4,849/mt ($748.8/mt), increasing by RMB 163/mt ($25/mt) or 3.48 percent since February 25, while rising by 0.1 percent compared to the previous trading day (March 3).

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 6.4758