Seaborne iron ore prices strengthened March 16 amid signs of rising iron ore demand in Northern China.
Global Platts assessed the 62% Fe Iron Ore Index at $166.30/dry mt CFR North China on March 16, up $2.65/dmt from March 15.
Market sentiment for iron ore demand became more bullish in the day with the potential easing of environmental controls in Tangshan.
Traders and end-users warmed to seaborne iron ore fines cargoes with a preference for medium to higher grade fines, on the back of healthy steel margins.
Rio Tinto sold a 170,000 mt cargo of PBF on COREX at $163.25/dmt CFR China basis 61% Fe, for loading April 5-14 and Vale sold a 170,000 mt cargo of BRBF on COREX at $166.40/dmt CFR China basis 62% Fe, for loading April 10-19.
"HRC inventories saw their first drop of 2021 in early March, while rebar inventories slowed their increase and are poised to start decreasing soon," a steelmaker source based in Northern China said. "The recent production controls could also support steel prices."
The 65% Fe-62% Fe iron ore fines spread widened to $26.30/dmt, the widest spread since October 2018, amid optimism over higher steel margins with the upcoming peak season for steel consumption in April.
Vale sold a 130,000 mt cargo of Carajas fines at $192.50/dmt CFR China basis 65% Fe on globalORE, with 1.2% alumina and 2.22% silica, loaded on March 11.
Similarly, market sources said they expected higher steel margins to support the high premiums for lump and pellet, especially with the low stockpiles of lump seen at Shandong ports.
However, availability of seaborne lump cargoes loading in May appear to be high than for March, an international trader source said. "Together with less stringent environmental controls, lump premiums could lose ground for arrival in May," the source said.
Global Platts assessed the spot lump premium at 51.05 cents/dry mt unit on March 16, flat from March 15, in line with tradable levels.
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