Iron ore prices have rebounded and moved above $80/mt CFR today, November 12, amid increases in iron ore and steel futures, which have come as a reaction to announced steel production restrictions. Prices for iron ore fines with 62 percent Fe content have risen by $2.5/mt today to $80.7/mt CFR. Brazilian fines with 65 percent of Fe have increased by a larger margin, adding $6.1/mt to $92.3/mt CFR.
A deal for 80,000 of Brazilian Carajas fines with 65 percent Fe has been done at $92.3/mt CFR at a trading platform today. Lower-than-expected shipments of iron ore from Vale have supported prices ex-Brazil. The miner’s sales guidance for this year was revised to 307-312 million mt, which is closer to the lower end of the previously anticipated range of 307-332 million mt. Stronger interest in higher grade iron ore is connected with Chinese mills’ attempt to lower emissions during steel production, as required by the Chinese government.
The Ministry of Ecology and Environment of China has announced winter anti-pollution programs. Manufacturers in the Yangtze river delta (Shanghai municipality, Jiangsu, Anhui and Zhejiang province) will have to cut smog particles PM2.5 by two percent, while the Fenwei plain region in northern China, where the Shanxi, Henan and Shaanxi provinces are located, was ordered to lower average PM2.5 by three percent up to the end of March. The announced plans will put pressure on the production of those mills which had worked at higher rates over the previous winter season.
The lower emissions and steel production ordered by the government have resulted in rebar futures prices at Shanghai Future Exchange surging by RMB 81/mt ($11.6/mt) since Monday to RMB 3,449/mt ($493/mt). Iron ore futures at Dalian Commodity Exchange have added RMB 14.5/mt ($2.1/mt) today to RMB 607/mt ($86.7/mt).
