Iron ore up further amid firm demand for high grades, active RMB-based trading

Iron ore prices for China have continued to move up today, November 21 as demand for high grade fines is still at high levels and overall trading on RMB basis from ports or directly from miners has been active. Iron ore fines with 62 percent Fe content have gained $0.7/mt today to $86.8/mt CFR, while Brazilian iron ore with 65 percent Fe has gained $1/mt to $99/mt CFR, SteelOrbis has learned.

At the GlobalOre platform, there have been two deals done today. A Brazilian Carajas fines cargo of 60,000 mt with 65 percent of Fe has been traded at $99/mt CFR for shipment in the second half of November. Higher demand for higher grade iron ore will be seen in the market in the near future, market sources said, because mills will try to increase the share of high grade ore in steel production to cut emissions following the fresh restrictions in Hebei which started on November 20 and for which no end date has been issued yet. Also, about 80,000 mt of Australian Newman lumps (about 62.5 percent Fe) have changed hands with a premium of $0.23/mt.

At the COREX platform, there has been one deal today for 10,000 mt of Fortescue Metals Group (FMG) lump ore with 57.2 percent Fe content at RMB 568/mt ($80.9/mt), which is the first deal FMG has sold directly at Chinese ports via the COREX platform in Chinese currency.

The still healthy steel market in China has provided additional support. Recently, China’s central bank has taken measures to inject liquidity into the market, exerting a positive impact on steel prices. Meanwhile, due to the low inventory levels amid good demand in warm winter weather conditions, steel prices in the local Chinese market have moved up, positively affecting iron ore prices.

Iron ore futures prices at Dalian Commodity Exchange have gained RMB 4.5/mt ($0.6/mt) or 0.71 percent today, coming to RMB 641.5/mt ($91.4/mt), signaling bullish sentiment towards the near-term prospects for the iron ore market.

Nevertheless, there are some concerns about steel prices in December as Chinese mills have been trying to increase production to the maximum allowed level to earn more in the bullish market, while the supply-demand balance may be broken next month when steel consumption will start to slow down.  

Rebar futures at Shanghai Future Exchange have decreased by RMB 41/mt ($5.8/mt) or 1.12 percent on Thursday compared to the previous trading day, while they added RMB 86/mt ($12.3/mt) on the previous day.

Imported iron ore prices (week-on-week basis)

Note：Price Includes VAT  

Nationwide iron ore concentrate prices

Note：Price Includes VAT 

$1 = RMB 7.0217