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The most-traded May iron ore futures contract on the Dalian Commodity Exchange (DCE) fell sharply, ending the day down by 7.6% from its closing price of 822 yuan ($130) per tonne last Friday.
And forward-month swaps contracts on the Singapore Exchange (SGX) followed the bearish trend. By 5:48 pm Singapore time, the most-traded April contract had fallen by $10.36 per tonne compared with last Friday’s settlement price of $157.61 per tonne.
Most market participants said the sharp dips on the DCE and SGX were due to the rise in new cases of Covid-19 in China, which had also led to a fall in demand from the construction sector.
Steel demand more generally, has also been limited, further adding to the bearish outlook for iron ore demand, according to market participants.
A Singapore-based trader said that preliminary macro-economic data released on Friday in China, had showed signals of a bearish outlook in the country’s economy, prompting additional pessimism.
The same trader said that more data was due to be released on Tuesday, but he believes the pessimistic views will continue to weigh down the economic outlook.
62% Fe fines, cfr Qingdao: $143.70 per tonne, down $11.36 per tonne62% Fe low-alumina fines, cfr Qingdao: $149.07 per tonne, down $12.41 per tonne58% Fe fines high-grade premium, cfr Qingdao: $123.27 per tonne, down $11.00 per tonne65% Fe Brazil-origin fines, cfr Qingdao: $174.90 per tonne, down $10.20 per tonne63% Fe Australia-origin lump ore premium, cfr Qingdao: $0.4650 per dry metric tonne unit (dmtu), up $0.0250 per dmtu62% Fe fines, fot Qingdao: 976 yuan per wet metric tonne (implied 62% Fe China Port Price: $142.9 per dry tonne), down by 23 yuan per wmt
“The previous bullish sentiment on downstream steel demand has cooled down due to the fast-growing new cases of Covid-19 [in China], which has prompted lockdowns in logistics and construction projects. This has probably dragged down iron ore futures on the DCE and front-month swaps contract prices on the SGX,” a Beijing-based trader source said.
BHP, Globalore, 80,000 tonnes of 62.5% Fe Newman Blend lump, traded at the April average of a 62% Fe index on an fob Australia basis, plus a lump premium of $0.4750 per dry metric tonne unit (dmtu), laycan April 11-20.
Globalore, 70,000 tonnes of 62.5% Fe Pilbara Blend lump, bid made at the April average of a 62% Fe index plus a lump premium of $0.4500 per dmtu, laycan April 1-10.
Fastmarkets index for iron ore 62% Fe finesPilbara Blend fines: $142.00-146.50 per tonne cfr QingdaoBrazilian Blend fines: $144.00-156.00 per tonne cfr QingdaoNewman fines: $141.32-144.30 per tonne cfr QingdaoMac fines: $134.28-135.63 per tonne cfr QingdaoJimblebar fines: $112.73-118.14 per tonne cfr Qingdao
Fastmarkets’ index for iron ore 65% Fe Brazil-origin finesIron Ore Carajas: $170.00-177.80 per tonne cfr Qingdao
Pilbara Blend fines were traded at 930-980 yuan per wmt in Shandong province and Tangshan city on Monday, compared with 975-1,010 yuan per wmt on Friday March 11.
The latest range is equivalent to about $136-143 per tonne in the seaborne market.
The most-traded May iron ore futures contract closed at 759.50 yuan ($120) per tonne on Monday, down by 62.50 yuan per tonne from last Friday’s closing price.
Alice Li in Shanghai and Norman Fong in Singapore contributed to this article.
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