Iron ore concentrate, pellet prices track uptick in fines segment

Seaborne iron ore concentrate and pellet prices rose slightly in the week ended Friday May 6, tracking the upward momentum in the iron ore fines segment, market sources said

Key drivers

Most market participants believe that a slight uptick in the iron ore fines segment lent some support to iron ore concentrate and pellet prices.

For instance, Fastmarkets’ index for iron ore 65% Fe Brazil-origin fines, cfr Qingdao, averaged $167.33 per tonne in the week to May 6, up by $1.57 per tonne (0.9%) from $165.76 per tonne the previous week.

Demand for seaborne iron ore concentrate, however, remained limited because most Chinese steelmakers were believed to be procuring cargoes from domestic suppliers, according to a Shanghai-based analyst.

The same analyst added that the weekly Chinese port inventory levels for iron ore concentrate had increased slightly week on week, further suggesting poor demand for the raw material.

There were more iron ore pellet offers in the market this past week, but transactions were sparse because buying interest for the direct-charge raw material remained limited, sources told Fastmarkets.

Steelmakers do not have any sintering restrictions imposed on their operations, so most mills were focused on keeping production of steel limited and preferred consuming a blend of low- and high-grade iron ore fines to keep production costs low amid narrowing margins, a northern China buyer said.

Demand for iron ore, in general, was limited across the board because mills remained uncertain of the demand outlook for downstream steel products with the ongoing restrictions prompted by emerging Covid-19 cases in major Chinese cities, a Hong Kong-based trader said.

Fastmarkets iron ore indices

  • 66% Fe concentrate, cfr Qingdao: $175.90 per tonne, up $1.34 per tonne
  • 65% Fe blast furnace pellet, cfr Qingdao: $217.86 per tonne, up $1.10 per tonne
  • Iron ore pellet premium over 65% Fe fines, cfr China: $51.60 per tonne, down $1.30 per tonne

To keep up with iron ore price trends throughout 2022, visit our iron ore market page.

Quote of the week

The depreciation of the Chinese yuan against the US Dollar continues to erode current levels of buying interest for iron ore concentrates in the overseas market. Given the tepid demand for high-grade iron ore in the domestic Chinese market, bids from Chinese importers are likely unable to match up with existing offers in the market,

a trader source based in Beijing said.

Trades/offers/bids heard in the market

Concentrate
Spot market, 64.72% Fe SMIS Magnetite Pellet Feed, offered at the June average of a 65% Fe index plus a premium of $9 per tonne, June delivery.

Pellet
Spot market, 50,000 tonnes of 63% Fe Rashmi pellet, traded at $165 per tonne cfr China, May loading.

Spot market, 55,000 tonnes of 62.5% Fe AMNS pellet, traded at the May average of a 62% Fe index plus a premium of $24 per tonne, April loading.

Spot market, 50,000 tonnes of 63% Fe Rashmi pellet, offered at May average of a 62% Fe index plus a premium of $21 per tonne, May loading.

Spot market, 55,000 tonnes of 63% Fe BRPL pellet, offered at the May average of a 63% Fe index plus a premium of $2 per tonne, April loading.

Spot market, 75,000 tonnes of 63% Fe BRPL pellet, offered at the June average of a 62% Fe index plus a premium of $26 per tonne, May loading.

Spot market, 55,000 tonnes of 63.3% Fe Amalgam pellet, offered at the May average of a 62% Fe index plus a premium of around $28-31 per tonne, laycan April 25-May 5.

Norman Fong in Singapore contributed to this report.

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