Iron Ore Remains Stable After China’s Return

On Monday, the 62% Fe index decreased $0.02/t to $126.98/dry metric tonne cfr. The 58% Fe index increased $0.02/t to $110.64/dmt cfr, and the 65% Fe index was $0.1/t higher at $141.4/dmt cfr.

The price of May iron ore on the Dalian Commodity Exchange increased by CNY 21/t ($3.11/t), while the price of February 62% Fe futures on the Singapore Exchange increased by $1.7/t to reach $128.76/t. The identical contract for futures on 65% and 58% Fe gained $2.45/t to close at $143.9/t and $1.03/t to close at $110.07/t, respectively.

On Monday, billet prices increased while scrap prices remained unchanged. Tangshan billet increased CNY 30/t to CNY 3,900/t, and the price of 6mm+ heavy scrap sent to mills in the Yangtze River Delta was CNY 3,042/t.

Trading on the spot market for iron ore was aided by optimism regarding demand. Global iron ore shipments decreased over the Chinese holiday week, and port landings of iron ore in China also decreased.

Steel market demand is anticipated to increase as Covid-19 transmission slows in China, underpinned by a rebound in the real estate sector. However, mills continue to prioritize cost savings as their primary objective for this year, which may have an impact on the price of imported iron ore.

Early this year, production is anticipated to begin at the Sishanling Iron Mine in Benxi, Liaoning province. 2.48 billion tonnes of iron ore with an average Fe grade of 31.19% are contained in the mine’s reserves. The project’s first phase will produce 5.07 million tonnes of iron ore concentrate annually with a Fe content of 67–69%.

The opening of the iron ore mine, a centerpiece of China’s “Cornerstone Plan,” would once more expand the country’s supply of iron ore domestically.