MB 62% Fe Iron Ore Index: $72.26 per tonne cfr Qingdao, up $3.11 per tonne.
MB 62% Fe Pilbara Blend Fines Index: $72.09 per tonne cfr Qingdao, up $3.14 per tonne.
MB 62% Fe Iron Ore Index-Low Alumina: $73.97 per tonne cfr Qingdao, up $1.91 per tonne.
MB 58% Fe Premium Index: $63.51 per tonne cfr Qingdao, up $1.75 per tonne.
MB 65% Fe Iron Ore Index: $86.90 per tonne cfr Qingdao, up $1.60 per tonne.
MB 62% Fe China Port Price Index: 553 yuan per wet metric tonne (implied 62% Fe China Port Price $71 per dry tonne), up 1 yuan per wmt.

Key drivers
A total of 2,550 lots or 255,000 tonnes of the 65% Fe iron ore derivative were traded and cleared by 18:30 Singapore time on Thursday. Trades were done for each calendar month from January to December 2019.

Thursday was the first time that trades were registered beyond the second half of 2019, “which shows that the contract is developing pretty well”, a senior executive at a broker said.

The derivative contract, which is settled based on Fastmarkets’ MB 65% Fe Iron Ore Index, was launched on December 3 and has attracted participation from miners such as Anglo American, banks, traders and funds, among others.

Prior to the launch, market participants had cited the ability of the derivative contract to provide a visible forward curve as one of the key reasons why they saw a need for it.

In the physical iron ore market, prices also jumped again in the day following an uptick in China’s ferrous futures in the afternoon.

Trading was very active at Chinese ports amid moderately higher prices, while seaborne cargoes also changed hands at stronger fixed prices or premiums on indices.

To improve air quality, north China’s steel hub of Tangshan announced further industrial restrictions on Thursday including a full-stop to local sintering production during December 20-31, according to sources.

Upgraded from earlier restrictions of 40-100%, the new order could further increase local mills’ need for iron ore lumps, a Chinese steelmaker source said.

Due to a better reception of lower grade materials in China, Fortescue Metals Group is narrowing the downward price adjustment for January shipments of its 56.5% Fe Super Special fines and 58.2% Fe Fortescue Blend fines to 37% and 28% respectively, from 40% and 29% for December shipments, according to sources.

The MB 62% Fe Iron Ore Index, published daily by Fastmarkets MB, rose $3.11 per tonne on Thursday, while the daily MB 65% Fe Iron Ore Index increased $1.60 per tonne. The price movements were based on the visible market activity detailed below, which was included in the index calculation according to the published methodology.

No data was discarded in the calculation of these indices. Any data received under Data Submitter Agreements or subject to a confidentiality request will not be published.

Quote of the day
“Iron ore inventories have stayed at relatively low levels at Chinese ports, so prices are are more prone to rise than to fall,” a trading source in east China told Fastmarkets.

Trades/offers heard in the market

Rio Tinto, tender, 170,000 tonnes of 61% Fe Pilbara Blend fines, sold at $70.93 per tonne cfr China, laycan January 3-12.

Vale, Global Ore, 100,000 tonnes of 65% Fe Iron Ore Carajas, traded at $87 per tonne cfr China, bill of lading dated November 19.

Beijing Iron Ore Trading Center (Corex), joint cargo, 70,000 tonnes of 62% Fe Pilbara Blend fines, traded at the January average of a 62% Fe index, plus a premium of $1.40 per tonne; 100,000 tonnes of 62.5% Fe Pilbara Blend lumps, traded at the January average of a 62% Fe index and its lump premium, adjusted for Fe content, plus a premium of $1.40 per tonne,, laycan January 12-21.

Corex, 170,000 tonnes of 62% Fe Pilbara Blend fines, sold at the January average of a 62% Fe index, plus a premium of $1.85 per tonne, laycan January 14-23.

BHP, Corex, joint cargo, 90,000 tonnes of 61% Fe Jimblebar fines, offered at the January average of two 62% Fe indices, adjusted for Fe content, plus a discount of $6.80 per tonne; 110,000 tonnes of 62.4% Fe Newman fines, offered at the January average of a 62% Fe index, adjusted for Fe content, plus a premium of $2.15 per tonne, laycan January 1-10 (Bid made at a discount of $7.25 per tonne, and a premium of $1.25 per tonne).

Corex, 90,000 tonnes of 61% Fe Jimblebar fines, offered at the January average of two 62% Fe indices, adjusted for Fe content, plus a discount of $6.50 per tonne, laycan January 1-10 (Bid made at a discount of $7.35 per tonne).

Global Ore, joint cargo, 90,000 tonnes of 62% Fe Mining Area C fines, offered at the January average of a 62% Fe index, plus a discount of $2.30 per tonne; 110,000 tonnes of 62% Fe Newman fines, offered at the January average of a 62% Fe index, plus a premium of $2.20 per tonne, laycan January 1-10.

Global Ore, 177,000 tonnes of 62% Fe Standard Sinter Feed Guaiba, offered at the January average of the MB 62% Fe Iron Ore Index and its value-in-use plus a premium of $1.80 per tonne, bill of lading dated December 7.

Anglo American, tender, joint cargo, 50,000 tonnes of 64.3% Fe Kumba Standard lumps, and 120,000 tonnes of 63.8% Fe Kumba Standard fines, laycan December 22-January 5.

Vale, tender, 165,000 tonnes of 64.55% Fe Lump Ore Carajas, sold late on Wednesday at the February average of the MB 62% Fe Iron Ore Index, adjusted for Fe content, plus a premium of $17.20 per tonne, bill of lading dated December 8.

Port prices
Pilbara Blend fines was trading at around 548-560 yuan per wmt in Tangshan city and in Shandong province on Thursday, compared with 545-555 yuan per wmt a day earlier, sources told Fastmarkets.

The latest price range was equivalent to $70.30-71.90 per tonne cfr China.

Dalian Commodity Exchange afternoon close

The most-traded May iron-ore futures contract closed at 496.50 yuan per tonne on Thursday, up by 9.50 yuan per tonne from Wednesday’s closing price.