Iron ore prices up sharply amid higher buying activity for after Chinese New Year holiday

Import iron ore prices in China have moved up sharply on Thursday, January 6, and are also higher week on week, amid improved demand for the raw material for February delivery after the Chinese New Year when steel production is expected to rebound.

Iron ore fines with 62 percent Fe content have risen by $3.2/mt to $128/mt CFR. This level is $9.8/mt above that seen a week ago. Brazilian iron ore with 65 percent Fe has moved up by $11.7/mt on January 6 to $156/mt CFR, up $18.3/mt week on week, SteelOrbis has learned.

On January 6, trading activity has been stronger. The highest interest has been seen for lower Fe content iron ore fines - 57-58 percent. Three deals for 80,000 mt of Yandi fines each for shipment during January 26 to February 4, January 26 to February 4 and February 1 to February 10, respectively, have been signed at the February index - $19.6/mt, - $19.4/mt and - $19.4/mt.

Also, a contract for 80,000 mt of Newman lumps has been done at the February index + $0.2875/mt.

Interest in higher-grade ore has also started to revive. A deal for 170,000 mt of Brazilian 65 percent Fe fines has been concluded at $156/mt CFR.

Import iron ore prices have indicated an overall uptrend also amid the rising trend of iron ore futures prices at Dalian Commodity Exchange (DCE). Iron ore futures prices at Dalian Commodity Exchange have edged up by 4.14 percent today coming to RMB 717/mt ($112.5/mt), while rising by RMB 47.5/mt ($7.5/mt) or 7.1 percent compared to December 30.

Following the New Year holiday, steelmakers have been willing to build up stocks of iron ore as they increased production capacity utilization rates at their blast furnaces now and the outlook for after the Chinese New Year holiday is good. The deliveries of iron ore from Brazil may decline due to the approaching rainy season, which will bolster iron ore prices to some extent. It is thought that import iron ore prices may edge up further in the coming week.

As of Thursday, January 6, rebar futures at the Shanghai Futures Exchange are standing at RMB 4,494/mt ($705.2/mt), rising by RMB 212/mt ($33.3/mt) or 4.95 percent since December 30, while increasing by 1.63 percent compared to the previous trading day (January 5).

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 6.3728