Spot iron ore prices gain on rise in steel prices in China

10th Sept 2018

Sentiments improved a little in the sea-borne iron ore market as the spot prices rose by more than $2/dmt in the week. However, the buying weakened towards the end of week as the buyers (mainly steel Chinese mills) became cautious.

In China, the steel mills, coke producers and utilities have been ordered to shut as much as 50 percent of their production capacity in order to lower harmful emissions. In the week, Tangshan, China’s biggest steelmaking hub, extended six-week summer production curbs that ran from July 20 to August 31 into September.

Looking at the benchmark for seaborne spot iron ore prices, Platts assessed the 62% Fe IODEX & TSI Iron Ore Fines at $68.85/dmt CFR North China on Friday. Meanwhile, TSI 58% Fe Fines, 1.5% Al, CFR Qingdao port closed the week at $69.65/dmt.

Futures Market

Onto the futures trade, at Dalian Commodity Exchange, the iron ore futures were mixed on Friday, with the most liquid January contract last trading at Yuan 498/dmt ($73.01/dmt), down Yuan 4.50/dmt from the previous day, and settling at Yuan 501/dmt, up Yuan 5.50/dmt over the same period.

Meanwhile, the coking coal futures edged up 0.5 percent to Yuan 1,273/dmt, while coke ended 2 percent lower at Yuan 2,349.5/dmt, at Dalian Commodity Exchange.

However,  the steel rebar futures continued to rise on Friday, with the most actively traded January contract on the Shanghai Futures Exchange last traded at Yuan 4,186 /mt ($613.68/mt), up Yuan 38/mt on the day, and last settled at Yuan 4,210/mt, up Yuan 87/mt over the same period.