Fastmarkets iron ore indices
62% Fe fines, cfr Qingdao: $174.07 per tonne, up $0.38 per tonne
62% Fe low-alumina fines, cfr Qingdao: $174.66 per tonne, up $0.53 per tonne
58% Fe fines high-grade premium, cfr Qingdao: $160.89 per tonne, up $1.20 per tonne
65% Fe Brazil-origin fines, cfr Qingdao: $195.30 per tonne, up $0.40 per tonne
62% Fe fines, fot Qingdao: 1168 yuan per wet metric tonne (implied 62% Fe China Port Price: $168.15 per dry tonne), up by 7 yuan per wmt
Key drivers
The most-trade iron ore futures May contract on Dalian Commodity Exchange (DCE) increased sharply after Monday’s opening and remained stable at intra-day high level through the day, ending up by 2.1% from last Friday’s closing price of 1,053 yuan ($163) per tonne.
Iron ore forward-month swaps contracts on the Singapore Exchange (SGX) also increased and, by 6:13pm Singapore time, the most-traded February contract had registered an increase of $1.34 per tonne compared with last Friday’s settlement price of $169.10 per tonne.
According to data released by China’s National Bureau of Statistics (NBS) on Monday, the country’s Gross Domestic Product (GDP) in 2020 reached a record high of 101.6 trillion yuan, up by 2.3% year-on-year.
China’s GDP grewby 6.5% in the fourth quarter.
A buyer source in southern China said the economic recovery, especially in the fourth quarter, supported bullish sentiment among market participants.
And widening spreads between lump and fines prices, along with high-grade and mid-grade products, also implies that the recovery in demand is not confined to China and, as a result, the bullish sentiment persists, he added.
However, the fire at Vale’s Ponta da Madeira (PDM) iron ore terminal in the northern state of Maranhão, could affect supplies, source told Fastmarkets.
A second buyer source in southern China said the fire at PDM broke out on January 14, but the extent of the damage was unclear, with no official statement from Vale as yet.
The market was still pricing in the information, which caused some concern about short-term supplies of Brazilian iron ore, thereby supporting prices, he added.
Sources were split over the likely scale of any impact on supplies, however.
And a trading source in Singapore said that only one berth out of a total of five had been suspended due to the damage, so the overall impact on loading and shipments was unlikely to be significant.
Quote of the day
“Demand for high-grade products in China and mill replenishment [activity] before the Chinese New Year holiday in February are the main factors driving up the prices [and] the impact of the fire at PMD could be over-estimated,” a trading source in Shanghai said.
Trades/offers/bids heard in the market
Beijing Iron Ore Trading Center (Corex), 170,000 tonnes of 61% Fe Pilbara Blend fines, traded at $170.60 per tonne cfr China, laycan February 5-14.
Corex, 70,000 tonnes of 62.5% Fe Pilbara Blend lump, bid made at the February average of a 62% Fe index, plus a lump premium of $0.3400 per dry metric tonne unit (dmtu), laycan January 27-February 5.
Corex, 170,000 tonnes of 57% Fe Yandi fines, offered at the February average of a 62% Fe index plus a premium of $1.50 per tonne, laycan February 6-15.
Corex, 90,000 tonnes of 60.8% Fe Mining Area C fines, offered at the January average of two 62% Fe indices plus a premium of $0.70 per tonne, laycan January 26-February 4.
Corex, joint cargo, 80,000 tonnes of 60.5% Fe Jimblebar Blend fines, offered at the January average of two 62% Fe indices; and 90,000 tonnes of 57% Fe Yandi fines, offered at the January average of two 62% Fe indices plus a premium of $1 per tonne, laycan January 26-February 5.
Corex, joint cargo, 60,000 tonnes of 60.5% Fe Jimblebar Blend fines, offered at the January average of two 62% Fe indices; and 50,000 tonnes of 62.3% Fe Newman fines, offered at the January average of two 62% Fe indices plus a premium of $2.50 per tonne, laycan January 16-25.
Corex, joint cargo, 80,000 tonnes of 60.8% Fe Mining Area C fines, offered at the January average of two 62% Fe indices plus a premium of $1.20 per tonne; and 90,000 tonnes of 62.3% Fe Newman fines, offered at the January average of a 62% Fe index plus a premium of $3 per tonne, laycan January 6-15.
Globalore, 100,000 tonnes of 62% Fe Jimblebar Blend fines, offered at the February average of two 62% Fe indices plus a discount of $2.45 per tonne, laycan February 6-15 (bid made at the February average of two 62% Fe indices plus a discount of $2.90 per tonne).
Port prices
Pilbara Blend fines were traded at 1,135-1,169 yuan per wmt in Shandong province, Tangshan and Tianjin city on Monday, compared with 1,135-1,145 yuan per wmt on last Friday.
The latest range is equivalent to about $163-168 per tonne in the seaborne market.
Dalian Commodity Exchange
The most-traded May iron ore futures contract closed at 1,075.50 yuan ($166) per tonne on Monday, up by 22.50 yuan per tonne from last Friday’s close.
Alex Theo in Singapore contributed to this article.
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