Iron ore prices have continued to move up gradually, mainly supported by the spot and futures rise in the steel market due to strong demand and the emissions reduction plans announced in Hebei. Today, Tuesday, November 19, iron ore with 62 percent Fe content has been assessed at $85.5/mt CFR, up $1/mt compared to Monday. Prices for Brazilian fines with 65 percent Fe have also increased by $1/mt to $97.2/mt CFR.
Iron ore demand has slowed down in the seaborne market as Chinese mills have been considering their needs, taking into account the recent announcement of China’s top steelmaking province of Hebei, which has activated an orange alert for heavy air pollution. As a result, steelmakers at two regions - the south central and eastern regions of Hebei Province (including Tangshan) - will be ordered to cut emissions from November 20 and this will result in stoppages of some equipment and 50 percent cuts at blast furnaces at major mills.
Rebar futures at Shanghai Future Exchange have surged by RMB 82/mt ($11.7/mt) since Monday, reaching RMB 3,635/mt ($519/mt) today, while the average spot rebar prices in China have increased by RMB 43/mt ($6.1/mt) to RMB 4,190/mt ($598/mt) ex-warehouse, according to SteelOrbis’ data. Steel prices have been driven by both sustainable demand and by supply concerns, sources said.
At the same time, emissions cut measures will put pressure on iron ore demand in the near future, and so a significant further increase is unlikely in the raw material market, sources said.
$1 = RMB 7.003