Spot iron ore hits $70 per tonne : KATM Exclusive

04 December 2017

On Friday, iron ore prices breached $70 per tonne mark as demand remained robust in China. Steel mills across China have been ordered to cut sinter production by up to half from this month through March.

Metal Bulletin’s 62% Fe Iron Ore Index closed this week at $70.11 per tonne CFR Qingdao, up by $1.98 per tonne. On Thursday, Metal Bulletin’s 62% Fe Iron Ore Index touched its more than two month’s high at $68.13 per tonne CFR Qingdao, highest since 20^th September.

Steel fundamentals

According to Mysteel’s latest estimation released on 1^st December, China’s daily steel output is expected to decline by a greater degree in the last ten days of November, down by 4.37% over ten days to 2.09 Mt/day over 21-30 November.

Week saw the spot rebar prices moving up by 120-250 yuan ($18-38) per tonne in China, while the key Tangshan billet price increased by 30 yuan per tonne. Stronger steel prices had helped lift raw materials like iron ore and coking coal, with both posting weekly gains.

Futures trade

Friday saw the most active iron ore contract for the month of May at Dalian Commodity Exchange rising as far as 529 yuan per tonne, highest since 19^th September, before ending at 526 yuan, up by 1.9%.

Also on Friday, at the Dalian Commodity Exchange, the coking coal futures rose 2.4% to 1,403 yuan a tonne and coke jumped 3.1% to 2,194 yuan.

In steel, the most traded rebar contract on the Shanghai Futures Exchange closed 0.5% lower at 3,977 yuan ($602) a tonne. But it hit 4,018 yuan earlier in the day, not far below Thursday’s intraday high of 4,043 yuan, which was its highest since 13^th September.