IRON ORE DAILY: Prices continue to rise on active port trading

Iron ore prices increased on Monday October 11, with active trading continuing at ports in China following on from the end of the week-long National Day holiday on Friday, sources told Fastmarkets.

Fastmarkets iron ore indices
62% Fe fines, cfr Qingdao: $135.03 per tonne, up $11.65 per tonne
62% Fe low-alumina fines, cfr Qingdao: $139.10 per tonne, up $12.15 per tonne
58% Fe fines high-grade premium, cfr Qingdao: $105.59 per tonne, up $9.73 per tonne
65% Fe Brazil-origin fines, cfr Qingdao: $160.00 per tonne, up $13.90 per tonne
63% Fe Australia-origin lump ore premium, cfr Qingdao: $0.2300 per dry metric tonne unit (dmtu), up $0.0700 per dmtu
62% Fe fines, fot Qingdao: 926 yuan per wet metric tonne (implied 62% Fe China Port Price: $133.18 per dry tonne), up by 35 yuan per wmt

Key drivers
The most-traded January iron ore futures contract on the Dalian Commodity Exchange (DCE) continued to climb after opening on Monday, ending the day up by 4.6% from last Friday’s closing price of 762.50 yuan ($118) per tonne.

The most-traded November iron ore forward-month swaps contract on the Singapore Exchange (SGX) also increased and, by 5:02pm Singapore time, had registered an increase of $10.65 per tonne compared with last Friday’s settlement price of $124.65 per tonne.

A trading source in Shanghai said that iron ore port trading in China continued to be active because of demand from steel mills, which thereby supported gains in iron ore prices.

Sources told Fastmarkets that there was market chatter about some easing of in crude steel production in certain provinces in China.

A buyer source in northern China said some small- and medium-scale mills in Shandong were ramping up steel production, thereby increasing demand and reinforcing the bullish outlook in iron ore.

Positive sentiment across commodity markets after the Chinese holiday and the surging prices for coal and coke could also support rising iron ore prices, a trading source in Singapore told Fastmarkets.

Quote of the day
“Some market participants are expecting [a higher] iron ore lump premium, with winter approaching, due to limited supplies of iron ore pellet - especially now the price-performance ratio of iron ore lump is better than for iron ore pellet, which has prompted some buyers to switch to consuming more iron ore lump,” a buyer source in Singapore said.

Trades/offers/bids heard in the market
Vale, Globalore, 170,000 tonnes of 62% Fe Brazilian Blend fines, traded at $139.10 per tonne cfr China, laycan November 14-23.

Beijing Iron Ore Trading Center (Corex), 170,000 tonnes of 65% Fe Iron Ore Carajas fines, traded at $160 per tonne cfr China, bill of lading dated October 8.

BHP, Globalore, 80,000 tonnes of 62.5% Fe Newman Blend lump, traded at the November average of a 62% Fe index on an fob Australia basis, plus a lump premium of $0.2500 per dry metric tonne unit (dmtu), laycan November 1-10.

Corex, 80,000 tonnes of 56.7% Fe Yandi fines, traded at the November average of two 62% Fe indices plus a discount of $22.90 per tonne, laycan October 28-November 6.

Corex, 120,000 tonnes of 61.5% Fe Pilbara Blend fines, traded at the October average of a 62% Fe index plus a premium of $1 per tonne, end-October arrival.

Rio Tinto, Globalore, 70,000 tonnes of 62.5% Fe Pilbara Blend lump, offered at the November average of a 62% Fe index, plus a lump premium of $0.2680 per dmtu, laycan November 3-12 (bid made at the November average of a 62% Fe index, plus a lump premium of $0.1500 per dmtu).

Globalore, 170,000 tonnes of 62% Fe Pilbara Blend fines, offered at the November average of a 62% Fe index plus a premium of $1 per tonne, November 1-20 delivery.

Market participant indications

Fastmarkets index for iron ore 62% Fe fines
Pilbara Blend fines: $133-136.50 per tonne cfr China
Newman fines: $134.85-135.34 per tonne cfr China
Mining Area C fines: $124.76-126.45 per tonne cfr China
Jimblebar fines: $114.78-119.90 per tonne cfr China

Port prices
Pilbara Blend fines were traded at 890-920 yuan per wmt in Shandong province, Tangshan and Lianyungang city on Monday, compared with 850-880 yuan per wmt on last Friday.

The latest range is equivalent to about $128-132 per tonne in the seaborne market.

Dalian Commodity Exchange

The most-traded January iron ore futures contract closed at 797.50 yuan ($124) per tonne on Monday, up by 35 yuan per tonne from last Friday’s closing price.

Alex Theo in Singapore contributed to this article.

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