Iron ore inches back to $70 mark after falling earlier in week: KATM Exclusive

11 December 2017

Spot prices of iron ore prices closed the week near $70 per tonne mark as the raw material found some support from the futures which gained on the back of much improved trade data for steel exports and iron ore imports.

Metal Bulletin’s 62% Fe Iron Ore Index closed this week at $69.35 per tonne CFR Qingdao, up by $3.65 per tonne. On Thursday, Metal Bulletin’s 62% Fe Iron Ore Index was at $65.70 per tonne CFR Qingdao.

Seemingly the production cuts by the Chinese steelmakers have led to tighter supplies, pushing steel prices to multi year high and driving up prices of iron ore as mills and traders restock in anticipation for steel production recovery after March.

Futures trade

On Friday, the most traded iron ore contract for May delivery at the Dalian Commodity Exchange closed down 1.2% at 506.50 yuan per tonne, after experiencing the day’s low of 4.4%.

More on the Dalian Commodity Exchange, the coking coal contract ended 3.6% lower at 1,265.50 yuan per tonne, well off the day’s trough of 1,215 yuan. Coke contract closed down 2.2% at 2,065 yuan, also recovering from an intraday low of 1,948 yuan.

Steel futures depicted reduced losses followed a recovery in rebar futures on the Shanghai exchange which ended 0.5% higher at 3,895 yuan a tonne, after sliding nearly 2% in the early trade during the day.

Steel and iron ore trade data

As per the recent trade data released by China’s General Customs of Administration, the country’s steel exports rose from the previous month to 5.35 million tonnes in November. However, the steel exports fell sharply from 8.12 million tonnes a year ago. Year-to-date exports fell 30.7% to 69.83 million tonnes on-year.

Furthermore, November’s steel imports in China rose to 1.14 million tonnes from 0.95 million tonnes in October, but total January-November imports stood almost steady at 12.1 million tonnes compared with 12.02 million tonnes a year ago.

Meanwhile, the iron ore imports of China rose 18.9% to 94.54 million tonnes in November from the previous month and were up 2.8 percent from a year ago. Moreover, the cumulative imports during the first 11 months climbed 6% to 990.73 million tonnes from 935.08 million tonnes a year ago.