Seaborne iron ore price continues to grow as demand is expected to remain firm. Global Platts assessed the 62% Fe Iron Ore Index at $233.1/dry mt CFR North China on May 12, up $4.20/dmt from May 11.
The front-month June 62% Fe derivatives were up $4.70/dmt from May 11 to $226/dmt on May 12.
Most sources do not see demand for low-grade fines recovering any time soon. An end-user source said that at current steel margin levels, using high-grade fines to increase the ferrous content in the ore blends would still yield more profit for the mills. Another trade source
echoed the opinion and saw further downside to the discount levels of Australian low-grade fines against the medium-grade index as stocks accumulated at Chinese ports.
However, cautious sentiments also arose among end-users. An end-user felt that procurement choices may shift more towards the medium grade fines as prices continue to surge and saw more enquiries for low-grade fines.
With the current crisis in India, several Chinese ports were heard taking precautionary measures and imposing additional charges on Indian cargoes. According to a Shandong-based mill source, the Rizhao Port Group has issued a notice to charge port fees for Indian cargo for epidemic prevention at Rizhao and Lanshan ports. Several other ports were also heard charging additional fees for epidemic prevention-related costs.
Trading activity was quiet at the ports in the morning. Transacted volume dropped since May 11 as sellers would rather hold out for higher prices later and mills became cautious in procurement amid rapidly rising raw material prices, according to sources.
IOPEX North China was assessed at Yuan 1,653/wmt FOT May 12, flat from May 11, or at $243.83/dmt on an import-parity basis. IOPEX East China was assessed at Yuan 1,694/wmt FOT May 12, flat from May 11, or at $249.89/dmt on an import parity basis.
Lump premiums continued to face headwinds. While some mills were heard still maintaining their usage of lump, several other market sources indicated that current price levels were not competitive for usage. Coupled with the coming of the wet weather season to the Southern and Eastern regions, handling lump becomes an issue.
Platts assessed the spot lump premium at 50 cents/dmtu on May 12, flat from May 11.
Disclaimer: this article is from the SBB STEEL MARKET DAILY, the copyright belongs to the original author, and only represents the original author's viewpoint.
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