Sea-borne iron ore inching towards $80 per tonne mark

Buying interest for spot sea-borne iron ore was bullish towards the end of the week as the news of possible extension of production limits did rounds, while the positive steel fundamentals supported the raw materials. Iron ore price recorded marginally rally and was seen nearing $80/dry mt mark on Friday.

Furthermore, the participants are upbeat about the Chinese economic outlook and believe that the sentiments from the recent recovery in global markets may support further gains. Steel mills are expected to boost output when winter curbs, aimed at fighting air pollution, are lifted by mid-March as the winter season heating ends.

Looking at the benchmark iron ore prices, Platts assessed the 62% Fe IODEX & TSI Iron Ore Fines at $79.20/dry mt CFR North China on Friday, depicting a gain of $1.15/dry mt on the day. Meanwhile, TSI 58% Fe Fines, 1.5% Al, CFR Qingdao port closed the week at $65.20/dry mt.

Domestic iron ore

Total iron ore inventories remained high in China. As per the latest report, the overall iron ore  inventory stood at approximately 157.48 million mt after the Chinese New Year holidays, up 5.1 million mt on the week.

Platts iron ore 62% Fe iron ore port stock index, or IOPEX North China, was assessed at Yuan 604/dry mt FOT Friday, up Yuan 5/dry mt on the day, or at $77.37/dry mt on import-parity basis. IOPEX East China was assessed at Yuan 599/dry mt FOT, up Yuan 6/dry mt on the day, or at $76.70/dry mt on import-parity basis.

Futures trade

Chinese rebar futures rebounded on Friday from a five-week low as investors piled back into Chinese commodities markets in anticipation of a pickup in demand after the Lunar New Year holiday. This rally was crossed over to the other steelmaking raw materials as well.

The most-active rebar contract for on the Shanghai Futures Exchange closed up 1.8 percent at 3,949 yuan a tonne, after earlier hitting 3,841 yuan, matching Thursday’s five-week trough. Volume traded on the most-active May contract reached 3.57 million lots, the largest since last week of January.

At Dalian Commodity Exchange, the most-traded May iron ore contract closed 2.1 percent higher at 548.50 yuan a tonne. Coking coal contract rose 1.7 percent to close at 1,398 yuan a tonne, while coke contract climbed 3 percent to end the week at 2,221 yuan per tonne.