IRON ORE DAILY: Prices correct down, use of Fastmarkets MB iron ore indices expands

Iron ore prices corrected down on Tuesday March 19, with futures and spot market activity at Chinese ports both declining after Monday's gains.

Tuesday also saw Fastmarkets’ MB 62% Fe Iron Ore Index used for the first time as part of a basket of measures to price Pilbara Blend fines.

MB 62% Fe Iron Ore Index: $87.23 per tonne cfr Qingdao, down $1.03 per tonne.
MB 62% Fe Pilbara Blend Fines Index: $86.35 per tonne cfr Qingdao, down $1.03 per tonne.
MB 62% Fe Iron Ore Index-Low Alumina: $89.20 per tonne cfr Qingdao, down $1 per tonne.
MB 58% Fe Premium Index: $79.09 per tonne cfr Qingdao, up $0.10 per tonne.
MB 65% Fe Iron Ore Index: $97.90 per tonne cfr Qingdao, down $0.10 per tonne.
MB 62% Fe China Port Price Index: 645 yuan per wet metric tonne (implied 62% Fe China Port Price $85.51 per dry tonne), down 2 yuan per wmt.

Key drivers
Brazilian miner Vale said late on Monday that local authorities had allowed it to restart activities at its Guaíba Island Terminal, after being suspended a week earlier.

While this is good news for iron ore supplies to the seaborne market and would be expected to put downward pressure on prices, market sources told Fastmarkets that latest data showed shipments from Brazil have declined.

China’s ferrous futures posted gains on Monday night, but largely weakened on Tuesday.

And spot iron ore trading at Chinese ports was less active compared with Monday, with prices edging down.

In the seaborne market, a cargo of Brazilian Blend fines traded at a fixed price $1 per tonne lower than on Monday, and index-linked shipments of Pilbara Blend fines were offered and sold at weaker premiums.

Rio Tinto was heard to have sold a Capesize cargo of Pilbara Blend fines based on the Fastmarkets MB 62% Fe Iron Ore Index and another 62% Fe index.

For 65% Fe Iron Ore Carajas, limited seaborne trading was heard in the day, leaving transaction prices at Chinese ports rangebound.

The daily Fastmarkets MB 62% Fe Iron Ore Index fell by $1.03 per tonne on Tuesday, while the daily Fastmarkets MB 65% Fe Iron Ore Index edged down $0.10 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.

For the calculation of the MBIOI-65, judgment was applied to carry over data in today’s indices due to low liquidity in the 24-hour pricing window, corresponding with published fall-back measures.

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
“The decrease in shipments from Brazil could gradually start to show up, including for Iron Ore Carajas, but so far Chinese mills have stayed cool about high-grade materials,” a trader in Beijing told Fastmarkets.

Trades/offers heard in the market
Vale, Global Ore, 170,000 tonnes of 62% Fe Brazilian Blend fines, traded at $89.20 per tonne cfr China, laycan April 7-16.

Fortescue Metals Group, tender, 188,000 tonnes of 56.5% Fe Super Special fines, sold at $71.15 per tonne cfr China, laycan March 26-April 5.

Rio Tinto, Beijing Iron Ore Trading Center (Corex), 170,000 tonnes of 62% Fe Pilbara Blend fines, sold at the April average of the Fastmarkets MB 62% Fe Iron Ore Index and another 62% Fe index at a premium of $1.50 per tonne, laycan April 5-14.

Corex, 170,000 tonnes of 62% Fe Pilbara Blend fines, traded at the April average of a 62% Fe index at a premium of $1.15 per tonne, laycan April 21-30.

Corex, 170,000 tonnes of 62% Fe Pilbara Blend fines, offered at the April average of a 62% Fe index at a premium of $1.60 per tonne, laycan April 9-18.

Corex, 170,000 tonnes of 61% Fe Pilbara Blend fines, offered at the April average of a 62% Fe index, adjusted for Fe content, plus a premium of $1.72 per tonne, laycan March 28-April 6.

Corex, 170,000 tonnes of 62% Fe Brazilian Blend fines, traded at the April average of the Fastmarkets MB 62% Fe Iron Ore Index-Low Alumina at a premium of $2 per tonne, laycan April 12-21.

BHP, private tender, joint cargo, 130,000 tonnes of 57% Fe Yandi fines and 110,000 tonnes of 63% Fe Newman Blend lump, laycan April 1-10.

Port prices
Pilbara Blend fines traded at around 635-642 yuan per wmt in Tangshan city and Shandong province during the day, compared with 635-645 yuan per wmt a day earlier, sources told Fastmarkets.

The latest price range was equivalent to $84.20-85.20 per tonne cfr China.

Dalian Commodity Exchange afternoon close
The most-traded May iron ore futures contract closed at 636 yuan per tonne on Tuesday, up by 3.50 yuan per tonne from Monday’s closing price.