Premium for Brazilian high grade iron ore shows small gain

Tuesday, 24 August 2021 22:42:00 (GMT+3)   |   Sao Paulo

In conjunction with a price increase for all iron ore grades in the Chinese spot market, the price of ex-Brazil 65 percent iron sinter feed fines is now $166/mt, against $158/mt late last week, CFR China conditions.

The premium of the high-grade ore over the Australian 62 percent ore grade, when considering their iron units, stands now at 8.4 percent, comparable to 7.6 percent previously, still one of the lowest premium levels of the year, an indication that the high performance of the ore in blast furnaces is not valued by integrated producers as it has been over the last several months.

The price for Brazilian blast furnace grade pellets, under the same conditions, is now $212/mt, against $204/mt late last week, under the same conditions.

In the Brazilian domestic market, the prices are estimated now at $122/mt for the ore and $168/mt for the pellets, ex-works, no taxes included, against $120/mt and $165/mt, respectively, late last week. Such prices were negatively affected by higher Brazil-China freight rates, as domestic prices are usually based on FOB Brazil conditions.

Sources mentioned that the ups and downs of iron ore prices remain mostly demand driven, as Chinese steelmakers remain slowing down their production, while many of them are comfortably sitting on excess stocks and selling the ore in the local market. Iron ore traders are reportedly assuming a similar strategy, as they also have too much ore in their positions.

On the supply side, there are reports of slightly reduced supply from Australia, while from Brazil preliminary figures point to a combined volume of iron ore and pellets in August exceeding the 31.69 million mt exported in July.

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