IRON ORE DAILY: SGX’s 65% Fe derivative contract hits record monthly volume
Singapore Exchange’s (SGX) 65% Fe iron ore derivative contract hit a monthly-traded volume of 2.0397 million tonnes as on Monday July 29, the highest since the contract’s launch on December 3, 2018.
Fastmarkets’ index for iron ore 62% Fe fines, cfr Qingdao: $117.99 per tonne, down $0.32 per tonne.
Fastmarkets’ index for iron ore 62% Fe Pilbara Blend Fines, cfr Qingdao: $1117.91 per tonne, down $0.32 per tonne.
Fastmarkets’ index for iron ore 62% Fe low alumina fines, cfr Qingdao: $119.21 per tonne, down $0.36 per tonne.
Fastmarkets’ index for iron ore 58% Fe fines high-grade premium, cfr Qingdao: $105.79 per tonne, down $1.05 per tonne.
Fastmarkets’ index for iron ore 65% Fe Brazil-origin fines, cfr Qingdao: $125.80 per tonne, down $0.80 per tonne.
Fastmarkets’ index for iron ore 62% Fe fines, fot Qingdao: 885 yuan per wet metric tonne (implied 62% Fe China Port Price $119.14 per dry tonne), up 4 yuan per wet metric tonne.
On Monday, 1,700 lots of the SGX 65% Fe derivative contract were traded and cleared by 6.30pm Singapore time.
A broker source told Fastmarkets that the volumes were headed in the right direction, with volatility in mid- and high-grade spread drivers attracting participants’ interest in derivatives trading.
The previous high was 1.907 million tonnes, which was cleared in December last year, followed by 1.54 million tonnes cleared in May.
Meanwhile, China’s iron ore futures prices trended lower in the morning trading session and continued to do so toward the close of afternoon trading session.
Chinese steel futures had also trended lower before the close of the market.
The market on Monday was heard to be more illiquid, with few market participants involved in the futures market, according to brokers.
A similar downward trend was also observed for the 62% Fe derivative contract on the SGX, as the August contract was seen weakening by around $1 per tonne to $114 per tonne, falling from the previous day’s closing price of $114.96 per tonne.
Furthermore, seaborne iron ore prices were down slightly on Monday, as spot market activity remained thin, with limited bids and offers heard, likely due to market participants adopting a wait-and-see stance.
Some market participants were likely waiting on the sidelines to observe the impact of when the environmental restrictions are lifted in the steelmaking hub of Tangshan.
A mill source also mentioned that there were no announcements on the blanket production cut for the upcoming winter, but buyers were probably being cautious and would rather monitor the situation closely instead of jumping into a buying spree.
Fastmarkets’ index for iron ore 62% Fe fines fell by $0.32 per tonne, while the daily index for iron ore 65% Fe Brazil-origin fines decreased $0.80 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 indices, 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.
Any data received under Data Submitter Agreements or subject to a confidentiality request will not be published.
Quote of the day
“Steel prices are down again and this is going to put a squeeze on mill margins, so most buyers are standing by the sidelines observing the market for now,” a mill source told Fastmarkets.
Trades/offers/bids heard in the market
BHP, private tender, 100,000 tonnes of 57.1% Fe Yandi fines, traded at the September average of two 62% Fe indices, adjusted for Fe content, September arrival.
Vale, Beijing Iron Ore Trading Center (Corex), 170,000 tonnes of 62% Fe Brazilian Blend fines, offered at $119.70 per tonne cfr China or at the September average of Fastmarkets’ index for iron ore 62% Fe low-alumina fines and another 62% Fe low-alumina index, plus a premium of $5.25 per tonne, laycan August 20-29.
Vale, Corex, 88,000 tonnes of 65% Fe Iron Ore Carajas, offered at $126.90 per tonne cfr China, bill of lading dated July 12.
Global Ore, 170,000 tonnes of 62% Fe Pilbara Blend fines, offered at $117.90 per tonne cfr China, laycan August 18-27.
BHP, Corex, 90,000 tonnes of 59.5% Fe Jimblebar fines, offered at the August average of two 62% Fe indices, adjusted for Fe content, plus a discount of $2.75 per tonne, laycan August 11-20.
Pilbara Blend fines traded around 875-893 yuan per tonne in Shandong province and Tangshan city during the day, compared with 870-895 yuan per tonne last Friday.
The latest price range was equivalent to $119.50-122 per tonne cfr China in the seaborne market.
Dalian Commodity Exchange
The most-traded January iron ore futures contract closed at 750.50 yuan per tonne on Monday, down 13.50 yuan per tonne from the previous day’s close.