Iron ore prices rise amid active demand and positive steel market outlook

Import iron ore prices in China have moved up today, Thursday, January 20, while they have indicated increases week on week too. The main reasons behind the hike have been the active trading seen over the past few days, still reduced supply form Brazil, and the positive steel market outlook in China.

Iron ore fines with 62 percent Fe content have moved up by $2.1/mt today to $132.7/mt CFR. This level is $5.4/mt above that seen a week ago. Brazilian iron ore with 65 percent Fe has moved up by $0.8/mt today to $163/mt CFR, while up $5/mt week on week, SteelOrbis has learned.

On January 20, six deals for 610,000 mt of iron ore have been concluded at trading platforms with the majority of them for lower quality ore with the Fe content less than 62 percent, amid lower prices and expected good consumption in March. A deal for 170,000 mt of 61.0 percent PB fines, for shipment during February 27 to March 8, has been done at $132.1/mt CFR with the price is $1.1/mt above that in the deal for the same quality fines yesterday. In addition, two contracts for 90,000 mt each of Yandi fines with Fe content slightly below 58 percent have been done at the March index -$14.5/mt and -$14.3/mt respectively. Also, lower quality Jimblebar fines have been sold at the March index -$20.1/mt. 80,000 mt of MAC fines have changed hands at $126.35/mt CFR. Among the higher grade ores, Newman fines (90,000 mt) with Fe content at slightly above 62 percent have been sold at $134.8/mt CFR.

Following some decline on Monday, import iron ore prices have been showing a steady uptrend over the past three days amid active demand and decreasing export shipments of iron ore from Brazil. Nevertheless, the iron ore arriving at Chinese ports has been stable or has even increased, which will ensure sufficient supply of iron ore in the short term. Steelmakers are building up some stocks of iron ore ahead of the long holiday, which has bolstered ore prices to some extent, while traders have also been active in securing volumes for March, expecting better demand for steel and iron ore as a result. However, the worsening Covid-19 pandemic in several regions of China will negatively affect the transportation of iron ore in the near future. It is thought that import iron ore prices may move sideways in the coming week due to the slowdown of activities ahead of the holidays.

Iron ore futures prices at Dalian Commodity Exchange have edged up by 1.3 percent today to RMB 742/mt ($116.9/mt), while rising by RMB 16/mt ($1.4/mt) or 2.2 percent compared to January 13.

As of Thursday, January 20, rebar futures at the Shanghai Futures Exchange are standing at RMB 4,713/mt ($741/mt), rising by RMB 80/mt ($12.6/mt) or 1.7 percent since January 13, while increasing by 0.32 percent compared to the previous trading day (January 19).

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 6.3485