Iron ore prices have increased further on Wednesday, March 4, amid active trading. The margins of steel mills have narrowed, but demand for different kinds of iron ore ore (from cheaper lower grades to ex-Brazil high grade and lumps) has persisted, as customers have been waiting for higher steel demand in April. Prices for iron ore with 62 percent Fe content have added $1.8/mt today to $90/mt CFR, while fines with 65 percent Fe have gained $2.3/mt to $106.5/mt CFR.
At the GlobalOre platform, there have been three deals done on Wednesday. Australian Newman fines with about 62 percent Fe (about 80,000 mt) have been traded at $90/mt CFR. 85,000 mt of ex-Brazil fines with 65 percent Fe have been sold at $106.5/mt CFR. About 70,000 mt of Pilbara lumps have changed hands at the April index with a premium of $0.319/mt. At the COREX platform, 170,000 mt of Pilbara fines have been traded at the April index with an extra of $2.25/mt. Yandi fines with about 58 percent Fe content have been sold with a discount of $2.7/mt, while in a deal on Thursday, February 27, the discount had reached $3.5/mt.
Recovering steel demand in the local Chinese market and the bright outlook for April together with still somewhat limited iron ore transportation volumes have led to a further price increase. As a result, following the downtrend last week, the price direction has changed again. According to a Macquarie bank analyst, despite huge steel product inventories at Chinese mills, a reduction of steel output is unlikely as demand will pick up in April and this will be sufficient for destocking.