Prices for iron ore have increased visibly on Monday, March 2, following the jump in raw material and steel futures prices. Expectations of further financial support from the Chinese government, the resumption of operations of downstream industries in China together with relatively low iron ore stocks at Chinese steel mills have caused the price increase today. Prices for iron ore with 62 percent Fe content have added $4.6/mt today to $88.2/mt CFR, while ex-Brazil fines with 65 percent Fe have gained $5.4/mt to $104.2/mt CFR.
About 170,000 mt of Pilbara fines with 62 Fe have been sold at the April index plus $2.25/mt. 80,000 mt of Mac fines, which have a lower Fe content than 62 percent, have been traded at the April index with a $1.6/mt discount. In total, 120,000 mt of Brazilian iron ore with 65 percent Fe have changed hands at $104.2/mt CFR.
Iron ore futures at Dalian Commodity Exchange have increased by RMB 36/mt ($5.2/mt) or 5.8 percent today to RMB 653/mt ($94.6/mt), reflecting the expectation of higher iron ore demand in the near future. Rebar futures have also gained - by RMB 68/mt ($9.8/mt) on the same day.
Nevertheless, there are still some concerns about the future market development. Despite recent firm iron ore demand, steel inventories at Chinese mills are still very high, preventing steel spot prices from recording any visible improvement so far, sources have said, and this is narrowing steelmakers’ margins.