Spot iron ore prices inches up towards the end of week

Sea-borne iron ore prices in the physical market were range bound mostly through the week but saw some upsides in the latter half as the steel prices improved over the demand from end users. Market was fundamentally supported as steel got impetus with increased buying ahead of upcoming holiday season in China.

Onto the benchmark iron ore prices, Platts assessed the 62% Fe IODEX & TSI Iron Ore Fines at $76.85/dry mt CFR North China on Friday. Moreover, TSI 58% Fe Fines, 1.5% Al, CFR Qingdao port closed at $61.55/dmt. Both the indices depicted an uptick of $2/dmt for the day.

High prices at the ports meant that the interest will be buoyed in sea-borne market which supported price rise, along with the gains in futures. Price spread between seaborne cargoes and port based material has narrowed down which have brought cost competitiveness to seaborne iron ore.

Meanwhile, the steel mills indicated that the production reduction and limitation measures have not finished in some regions and thus the market demand growth is limited. Therefore, they are mainly replenishing their stocks in the short term based on demand. Iron ore spot prices are estimated to witness strong trend in the following market and will see small steady growth in the short term.

Futures markets

Paper trade saw the sentiments rolling over from the physical markets. Rally was noted in almost all the major steel and steelmaking commodities.

Iron ore futures traded on the Dalian Commodity Exchange rebounded Friday, with the most liquid May contract last trading at Yuan 543.5/dmt, up Yuan 6.5/dmt on the day, and settling at Yuan 537/dmt, up Yuan 2/dmt over the same period.

Steel rebar futures also increased, with the most actively traded May contract on Shanghai Futures Exchange last traded at Yuan 3,926/mt, up Yuan 67/mt day on day, and settled at Yuan 3,883/mt, up Yuan 40/mt over the same period.