Iron ore prices fell for a second consecutive day Sept. 19 despite ample trades and firm demand seen in the seaborne market, sources said.
Platts assessed the 62% Fe Iron Ore Index at $122.75/dry mt CFR North China Sept. 19, down $1.7/dmt from Sept. 18.
While liquidity in the market was firm due to the restocking activities in preparation for the “Golden Week” holiday period, the decrease in price reflects a normal price correction from
the market’s high prices in the past week, according to market sources.
“Weak steel demand in China’s domestic market could hardly support the raw material prices,” a China-based iron ore trader said.
During the day, BHP sold two Jimblebar fines cargoes of 80,000 mt at the October average of IODEX, with both having a loadport laycan of Oct. 5-16. The first cargo was at a discount of $3/dmt and the other at $2.95/dmt CFR China over an October average of indexes.
Sources said that low steel production margins also supported trading activities for low-grade fines.
Additionally, on the lower iron content front, BHP concluded a cargo of Yandi Fines at a premium of $0.6/dmt CFR China over the October average of indexes with a loadport laycan of Oct. 11-20.
In the secondary market, a trade was heard concluded for SP10 fines via bilateral negations at a discount of 5.64% over a November average of IODEX with a loadport laycan of Oct. 27-Nov. 5.
At China’s portside market, iron ore prices remained resilient, as spot prices stayed strong throughout the day. Buying activities remained firm, as the market was counting down toward the long holiday, according to market sources. During the day, despite the hike in prices reflecting the high interest and low supply, SSF remained well traded.
While liquidity remained at portside, prices stayed calm and largely unchanged. Platts assessed 62% Fe IOPEX Yangtze River Ports China at Yuan 997/wmt FOT Sept. 19, unchanged on the day, or at $ 129.84/ dmt on an import-parity basis. Platts assessed 62% Fe IOPEX North China at Yuan 965/ wmt FOT, down Yuan 2/wmt on the day, or at $ 125.52/dmt on an import-parity basis. Platts assessed 62% Fe IOPEX East China at Yuan 952/wmt FOT, down Yuan 5/wmt on the day, or at $ 124.41/ dmt on an import-parity basis.
Meanwhile, lump restocking activities continued on both seaborne and port stock markets during the day. Sources said besides the steel mills, traders were also building positions, expecting the lump demand to continue to pick up after the Chinese National Holiday.
Co-loaded Pilbara Blend Fines and Pilbara Blend Lump cargoes were heard tradable at above $2/dmt premium on a floating basis earlier in the day, up $0.2-$0.5/dmt from the last week. However, some end-users expressed concerns about the weak steel mill margins, which might not continue to support the premium of mainstream Australian lumps.
“The lump demand concentrates on low-grade lump and discounted lump cargoes due to the cost-effectiveness. For mainstream Newman Blend Lump and PBL, the premiums are
already at a high level considering the margin level,” a steel mill source based in East China said. The supply of PBL on the spot market continued to improve Sept. 19, with the market feedback pointing out a narrowing spread between PBL and NBL. This led Platts to reduce the brand premium of PBL to 0.5 cent/dmtu, from 1 cent/dmtu on Sept. 18.
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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