Iron ore prices ease amid depressed market sentiment

Seaborne iron ore prices fell on Monday April 11 due to depressed market sentiment prompted by the rise in Covid-19 cases in China, sources told Fastmarkets

Key drivers

Covid-19 cases continued rising in several major cities in China, prompting provincial governments to impose lockdowns to contain the spread of infection, according to market sources.

The lockdowns have prompted weaker demand for downstream steel products, and kept demand for iron ore weak and market sentiment depressed, market sources added.

Several steelmakers remained wary about steel demand because of the ongoing lockdowns in major cities which have halted construction projects, so steel mills have resorted to controlling their steel output and looking at ways to keep costs down, a Singapore-based trader said.

There were some offers for seaborne iron ore cargoes on the trading platforms, but no bids were heard to have been tabled and no transactions were concluded, the same trader said.

Trading activity at Chinese ports were limited and more transactions were heard concluded for low-grade iron ore fines, according to a Hong Kong-based trader.

The most-traded September iron ore futures contract on the Dalian Commodity Exchange fell gradually throughout the trading session on Monday, ending the day down 5.4 % from Friday’s closing price of 918.50 yuan per tonne.

The forward-month swaps contracts on the Singapore Exchange followed a similar trend. By 5:59 pm Singapore time, the most-traded May contract had fallen by $3.07 per tonne from Friday’s settlement price of $155.07 per tonne.

Fastmarkets iron ore indices

  • 62% Fe fines, cfr Qingdao: $150.65 per tonne, down $3.44 per tonne
  • 62% Fe low-alumina fines, cfr Qingdao: $154.24 per tonne, down $3.41 per tonne
  • 58% Fe fines high-grade premium, cfr Qingdao: $132.40 per tonne, down $2.23 per tonne
  • 65% Fe Brazil-origin fines, cfr Qingdao: $174.90 per tonne, down $3.20 per tonne
  • 62% Fe fines, fot Qingdao: 1,004 yuan per wet metric tonne (implied 62% Fe China Port Price: $146.58 per dry tonne), down by 23 yuan per wmt

Quote of the day

“The widely-anticipated loosening of containment restrictions in Tangshan city was expected to ramp up domestic demand for iron ore, with mills slated to restock low inventories of raw materials. Trading activity in the domestic Chinese ports was nonetheless a lot thinner compared with the previous week,” according to a Shandong-based trader source.

Trades/offers/bids heard in the market

Beijing Iron Ore Trading Center, 170,000 tonnes of 61% Fe Pilbara Blend fines, offered at $149.50 per tonne cfr China, laycan May 3-12.

Globalore, 170,000 tonnes of 62% Fe Pilbara Blend fines, offered at the May average of a 62% Fe index plus a discount of $0.50 per tonne, laycan April 15-24.

Globalore, 170,000 tonnes of 62% Fe Pilbara Blend fines, offered at the May average of a 62% Fe index plus a discount of $0.50 per tonne, laycan May 1-20.

Market participant indications

Fastmarkets index for iron ore 62% Fe fines

Pilbara Blend fines: $147.50-150.74 per tonne cfr Qingdao
Brazilian Blend fines: $151-159.21 per tonne cfr Qingdao
Newman fines: $149.26-151.27 per tonne cfr Qingdao
Mac fines: $141.53-142.76 per tonne cfr Qingdao
Jimblebar fines: $122.98-131.17 per tonne cfr Qingdao

Fastmarkets’ index for iron ore 65% Fe Brazil-origin fines

Iron Ore Carajas: $173-176.90 per tonne cfr Qingdao

Port prices

Pilbara Blend fines were traded at 968-990 yuan per wmt in Shandong province on Monday, compared with 991-1,320 yuan per wmt on Friday.

The latest range is equivalent to about $141-144 per tonne in the seaborne market.

Dalian Commodity Exchange

The most-traded September iron ore futures contract closed at 868.50 yuan ($136) per tonne on Monday, down by 50 yuan per tonne from Friday’s closing price.

To keep up with iron ore market trends and prices throughout 2022, visit our iron ore page.

Tianran Zhao in Shanghai and Norman Fong in Singapore contributed to this article.

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