Sentiment in iron ore market strong despite today’s slight price retreat

Iron ore prices have edged down today, Thursday, May 14, though they are still $5.4/mt higher than on May 7. Sentiments have stayed strong as transaction activity has been at decent levels, while steel prices have seen an overall uptrend amid good demand and an upward trend has still been seen in iron ore futures prices.

Iron ore fines with 62 percent Fe content have edged down slightly today by $0.7/mt today to $89.8/mt CFR, while Brazilian iron ore with 65 percent Fe has been at $108.6/mt CFR, down by $0.3/mt on the same day, SteelOrbis has learned.

A deal for 210,000 mt of 62 percent Pilbara fines has been concluded at the June index plus $1.6/mt for delivery in July. Another deal for 80,000 mt of 57.1 percent Yandi fines has been at the June index for 62 percent fines with a discount $4.2/mt. A contract for 85,000 mt of 65.0 percent Fe Carajas fines has been concluded at $108.6/mt CFR. Moreover, 90,000 mt of Mac fines have been sold at the June index minus $0.3/mt. About 170,000 mt of Pilbara fines have also changed hands at the June index with a $2.3/mt extra.

During the given week, since there has been a shortage of supply of some iron ore grades at certain ports, steelmakers have had to accept the rises in import iron ore prices. Steelmakers’ inventories of iron ore were at comparatively high levels ahead of the Labor Day holiday, and so they have been unwilling to build up stocks of iron ore this week, but purchase volumes have remained strong, supported by bullish sentiments in the steel market. Though steelmakers do not want to accept high-level iron ore prices, the low inventories of iron ore at ports - which have fallen to their lowest level of the past four years – have supported iron ore prices.

Iron ore futures prices at Dalian Commodity Exchange have edged up by 1.09 percent today compared to yesterday to RMB 647.5/mt ($91.3/mt), while gaining 3.9 percent compared to May 7.

On Thursday, rebar futures at Shanghai Future Exchange have increased by RMB 6/mt ($0.8/mt) or 0.17 percent to RMB 3,445/mt ($486/mt) since May 7, while decreasing by 0.52 percent compared to the previous trading day.

However, the National People’s Congress (NPC) and The Chinese People’s Political Consultative Conference (CPPCC) will be held on May 22 and according to some market expectations it will result in strict environmental protection measures implemented in the coming period and may negatively affect the demand for iron ore.

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 7.0948