IRON ORE DAILY: Seaborne prices steady, interest in 65% Fe derivative contract stays firm

Seaborne iron ore prices were steady on Friday June 28, with only minimal price moves compared with Thursday's activity, but interest in the Singapore Exchange’s (SGX) 65% Fe iron ore derivative contract remained strong.

By 6:30pm Singapore time, 205,000 tonnes had been traded and cleared on the contract, according to SGX data. This compares with 143,000 tonnes traded the previous day.

MB 62% Fe Iron Ore Index: $118.47 per tonne cfr Qingdao, up $0.45 per tonne.
MB 62% Fe Pilbara Blend Fines Index: $116.51 per tonne cfr Qingdao, up $0.45 per tonne.
MB 62% Fe Iron Ore Index-Low Alumina: $119.64 per tonne cfr Qingdao, up $0.67 per tonne.
MB 58% Fe Premium Index: $109.11 per tonne cfr Qingdao, up $1.03 per tonne.
MB 65% Fe Iron Ore Index: $128.10 per tonne cfr Qingdao, up $0.60 per tonne.
MB 62% Fe China Port Price Index: 864 yuan per wet metric tonne (implied 62% Fe China Port Price $116.15 per dry tonne), up 4 yuan per wmt.
MB 63% Fe Australian Lump Premium: $0.3950 per dry metric tonne unit, up $0.0350 per dmtu.

Key drivers
Trading activity was limited in the physical market on Friday, with bids and offers largely holding steady.

Buying interest on the trading platforms was mostly confined to medium grade iron ore fines, with bids made at premiums of around $5.10-5.20 per tonne cfr China for the Pilbara Blend fines – almost similar levels to the previous day – although no trades were concluded, according to market participants.

A cargo of Newman lump was traded on the platform at the July average of a 62% Fe index, adjusted for Fe content, plus a lump premium of $0.40 per dmtu on an fob basis. The previous trade occurred on June 20 at the July average of a 62% Fe index, adjusted for Fe content, plus a lump premium of $0.3675 per dmtu on an fob basis.

Market participants said they were curious about the higher price achieved for the lump cargo.

Some traders suggested that the maintenance announced by BHP for early July could be a partial reason for the higher price.

Port-side trading activity in China was also limited on Friday, with prices for Pilbara Blend fines trading at a slightly higher price, sources said.

This could also suggest that demand for medium-grade iron ore fines is still healthy, with supply tightness a driving force behind the rising prices, according to other market participants.

Fastmarkets’ daily MB 62% Fe Iron Ore Index rose by $0.45 per tonne, while the daily MB 65% Fe Iron Ore Index increased $0.60 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.

For the calculation of the MBIOI-65, judgment was applied to carry over data in today’s index due to low liquidity in the 24-hour pricing window, corresponding with published fallback 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
“Port prices were still seen on an uptrend in China, but activity seems limited overall, [although] this could also be due to tighter inventories at the ports,” a China-based trader told Fastmarkets.

Trades/offers/bids heard in the market
BHP, Global Ore, 80,000 tonnes of 62.5% Fe Newman lumps, traded at the July average of a 62% Fe index on an fob Australia basis, adjusted for Fe content, plus a lump premium of $0.4000 per dry metric tonne unit, laycan July 26-August 4.

Vale, Global Ore, 100,000 tonnes of 62% Fe Standard Sinter Feed Guaiba, traded at the August average of the Fastmarkets MB 62% Fe Iron Ore Index, adjusted for Fe content, plus a premium of $4.50 per tonne, bill of lading dated June 24.

Vale, tender, 98,500 tonnes of 63.76% Fe Lump Ore Carajas, traded at the August average of the Fastmarkets MB 62% Fe Iron Ore Index and its value-in-use, plus a premium of around $11 per tonne, bill of lading dated June 26.

Vale, Global Ore, 170,000 tonnes of 62% Fe Brazilian Blend fines, traded late on Thursday at the August average of the Fastmarkets MB 62% Iron Ore Index-Low Alumina and another 62% Fe index at a premium of $5 per tonne, laycan July 29-August 7.

BHP, Beijing Iron Ore Trading Center (Corex), 90,000 tonnes of 62.4% Fe Newman fines, offered at $117.40 per tonne cfr China or at the July average of a 62% Fe index, adjusted for Fe content, plus a premium of $5.35 per tonne, laycan Jul 26-August 4 (bid made at $116 per tonne cfr or at the July average of a 62% Fe index, adjusted for Fe content, plus a premium of $4.80 per tonne).

Global Ore, 170,000 tonnes of 62% Fe Pilbara Blend fines, bid made at the July average of a 62% Fe index at a premium of $5.30 per tonne, laycan July 10-19.

Global Ore, 80,000 tonnes of 62% Fe Newman fines, bid made at the July average of a 62% Fe index at a premium of $4.70 per tonne, laycan July 16-25.

Global Ore, 80,000 tonnes of 62% Fe Mining Area C, Newman, or Pilbara Blend fines, bid made at the August average of a 62% Fe index at a premium of $3.10 per tonne, August arrival.

Port prices
Pilbara Blend fines were trading at around 855 yuan per wmt in Shandong province during the day, around similar levels to Thursday, sources told Fastmarkets.

The latest price range was equivalent to around $114-115 per tonne cfr China in the seaborne market.

Dalian Commodity Exchange
The most-traded September iron ore futures contract closed at 838.50 yuan per tonne on Friday, up by 17 yuan per tonne from Thursday’s closing price.

Deepali Sharma contributed to the article.