Spot iron ore prices inch towards $70 per tonne mark: KATM Exclusive

27 November 2017

Supported by strong steel margins, the increased demand for iron ore kept prices buoyed this week. Platts assessed the 62% Fe IODEX at $68.45/dmt CFR North China Friday, up $0.75/dmt on the day, and also up $5.70/dmt on the week.

Increased profit margins have been encouraging Chinese mills to boost output, at a time when cities in the northern part of the country have imposed restrictions on sintering to cut pollution during winter. Mills across northern China have been ordered to reduce sintering output from this month through March.

Furthermore, recent data from China Iron and Steel Association (CISA), indicated that the major steel mills produced steel at an average rate of 1.8017 million tonnes in the first 10 days of November, up 0.7% from the last 11 days of October.

Futures market

On Friday, the most active iron ore contract on the Dalian Commodity Exchange closed up 1.5% at 513.50 yuan ($78) a tonne, after hitting 515.50 yuan intraday, its strongest level since mid-September.

Furthermore, coking coal contact rose nearly 3% to a 10-week high of 1,343 yuan a tonne, and gained 12% on the week, the biggest such increase in a year.

Onto steel, the most-traded rebar on the Shanghai Futures Exchange was off 0.4% at 3,814 yuan a tonne on Friday, but increased 4%this week, the most since early August.