IRON ORE DAILY: Seaborne prices up with focus shifting to South Africa
Seaborne iron ore prices strengthened on Tuesday March 24 after a massive drop of nearly $7 per tonne the previous day, with market participants awaiting clarity on the impact of the 21-day lockdown in South Africa on iron ore operations in the country.
Fastmarkets iron ore indices
62% Fe fines, cfr Qingdao: $83.97 per tonne, up $2.90 per tonne
62% Fe low-alumina fines, cfr Qingdao: $85.50 per tonne, up $3.33 per tone
58% Fe fines high-grade premium, cfr Qingdao: $74.76 per tonne, up $4.12 per tonne.
65% Fe Brazil-origin fines, cfr Qingdao: $102.10 per tonne, up $5.40 per tonne
62% Fe fines, fot Qingdao: 647 yuan per wet metric tonne (62% Fe China Port Price: $83.48 per dry tonne), down 5 yuan per wmt.
Futures prices on the Singapore Exchange and Dalian Commodity Exchange both moved up during the day, following steep losses the previous day that some participants described as a result of panic selling.
Fixed price transactions picked up on Tuesday, though the market’s focus remained on the supply uncertainty from South Africa following the 21-day nationwide lockdown in the country.
Miner Anglo American is looking into how its iron ore operations in South Africa might be affected, though it did not announce any specific measures that it will take with regard to the operations of its mines, including the Kumba iron ore operations, it said.
“Anglo American will review the detailed regulations relating to this action that are being published, including in relation to exemptions for certain business activities, and will issue a further statement in due course,” it said on Tuesday.
“Many steel mills use African iron ore and the lockdown in South Africa might have an impact on supply, but the market is in wait-and-see mode,” a trader source said.
The trader also drew attention to the tight availability of Brazilian low-alumina cargoes and the potential for lower iron ore demand in Europe following mills’ closures due to the novel coronavirus (2019-nCoV) spread.
Limited supply of Brazilian iron ore during the first quarter of 2020 has been one of the key supporting factors for seaborne iron ore prices in the face of the Covid-19 outbreak in China and globally.
The source, however, said that while he thought the European situation did not affect Chinese demand, he was focused on miners’ productivity amid the virus outbreak.
Mid-April shipments of Pilbara Blend fines can fetch a premium of around $1.60 per tonne against 62% Fe fines index, while the May delivery shipments can still fetch a premium above $2 per tonne, trading sources said.
Quote of the day
“Beijing and Zhejiang governments are releasing various stimulus policies on automobile sector, and other provinces are most likely to follow to boost consumption and the economy in the coming months,” a mill source in Beijing said.
Trades/offers/bids heard in the market
Rio Tinto, Beijing Iron Ore Trading Center (Corex), 170,000 tonnes of 61% Fe Pilbara Blend fines, traded at $81.70 per tonne cfr China, laycan April 27-May 6.
Vale, Corex, 65,000 tonnes of 65% Fe Iron Ore Carajas, traded at $102.15 per tonne cfr China, March loading.
BHP, Corex, 90,000 tonnes of 57.1% Fe Yandi fines, traded at the April average of two 62% Fe fines indices, adjusted for Fe content, plus a discount of $3.20 per tonne, April delivery.
Globalore, 80,000 tonnes of 62.5% Fe Newman Blend lump, offered at the April average of a 62% Fe iron ore index, plus a premium of $0.3080 per dry metric tonne per unit, laycan April 11-20.
Globalore, joint cargo, 130,000 tonnes of 62% Fe Jimblebar fines offered at the April average of two 62% Fe iron ore indices with an 8.75% discount, plus a premium of $0.40 per tonne; and 110,000 tonnes of Newman fines offered at the April average of a 62% Fe iron ore index, plus a premium of $2 per tonne.
Globalore, 80,000 tonnes of 62% Fe Mining Area C fines offered at the April average of two 62% Fe iron ore indices, plus a discount of $1.45 per tonne, April arrival (bid made at the April average of to 62% Fe iron ore indices plus a discount of $2.40 per tonne).
Spot market, 170,000 tonnes of 62% Fe Pilbara Blend fines, bid heard made at May average of a 62% Fe fines index, plus $1.80 per tonne cfr China, May delivery.
Port prices Pilbara Blend fines were traded at 615-648 yuan per wet tonne in Shandong province, Tangshan city and Tianjin city on Friday, compared with 650-676 yuan on Monday.
The latest range is equivalent to about $79.11-83.55 per tonne in the seaborne market.
Dalian Commodity Exchange
The most-traded May iron ore futures contract closed at 639.50 yuan per tonne on Tuesday, up 10.50 yuan per tonne from Monday’s close.
Deepali Sharma in Singapore contributed to this report.