Iron ore prices have posted an increase on Thursday, August 8, as customers decided to restart purchases in the overseas market after silence since the beginning of the week. Prices of Australian iron ore fines with 62 percent Fe content increased by $1.75/mt from Wednesday to $93.5-94/mt CFR, while Brazilian 65 percent Fe fines added $1/mt, reaching $102-103/mt CFR.
Rio Tinto closed a tender for 170,000 mt of Pilbara fines today, with the deal price based on the September index plus $3.01/mt. Most customers have preferred to book the raw material using indexes at the moment as it is too risky to fix the price in the current market contitions. Two deals were signed at the COREX platform on Thursday. About 170,000 mt of low-alumina fines were sold at the September index plus $2.2/mt. A deal for 100,000 mt of Jimblebar fines with 61 percent Fe was concluded at the October index minus $2.7/mt. All cargoes will be shipped in September.
“It is a common situation when some price rebound follows a sharp drop,” a Chinese trader said. Though trading activity has improved and it is likely that Chinese mills will try to keep steel production at high levels or will even try to increase production due to the relaxation of environmental restrictions for August, overall sentiments in the iron ore market have stayed negative. January futures at the Dalian Commodity Exchange have continued their decline, losing 2.1 percent on Thursday to RMB 664/mt. It is unlikely that the price increase in the spot market will continue for long.
