Iron ore down week on week, outlook pessimistic despite end of third plenum

Import iron ore prices in China have seen increases today, Thursday, July 18, while posting some declines compared to July 11. Overall, the outlook has remained pessimistic as demand is expected to weaken more than supply and no specific stimulus to support the real estate sector has been disclosed after the third plenum in Beijing which ended today.

Iron ore fines with 62 percent Fe content have seen a rise of $0.5/mt on July 18 to $105.2/mt CFR. This level is $2.2/mt below that seen on July 11. Brazilian iron ore with 65 percent Fe has increased by $0.3/mt on July 18 to $121/mt CFR, while down $3.4/mt week on week, SteelOrbis has learned.

44 deals for a total of 856,800 mt of iron ore have been transacted on the Corex platform on July 18. In particular, one deal for 190,000 mt of 58 percent Fe fines has been signed at $87.5/mt CFR for shipment during August 12-21. Another contract for 170,000 mt of 61 percent PB fines has been done at $104.25/mt CFR, for shipment during August 27-September 5, and 90,000 mt of 60.5 percent Jimblebar blended fines have been traded at the August 62 percent index -$7.9/mt, for shipment during August 13-22.  

During the given week, import iron ore prices have decreased as more blast furnaces have been undergoing maintenance. Import iron ore shipments in the global market are anticipated to decrease in the coming week, which may bolster prices to a certain degree. However, molten iron output is expected to continue to fall, which will reduce the demand for iron ore. The inventory of iron ore at Chinese ports may increase, which will exert a negative impact on prices. It is thought that import iron ore prices may edge down in the coming week. “We may see $100/mt CFR for iron ore as there is no strong news are from the third plenum, as least according to their statement today,” a Chinese source said.

Iron ore futures prices at Dalian Commodity Exchange have decreased by 0.92 percent today to RMB 811.5/mt ($114/mt) compared to the previous trading day, July 17, while decreasing by RMB 16.5/mt ($2.3/mt) compared to July 11.

As of July 18, rebar futures at Shanghai Futures Exchange are standing at RMB 3,492/mt ($493/mt), decreasing by RMB 22/mt ($3.1/mt) or 0.6 percent since July 11, while down 0.82 percent compared to the previous trading day, July 17.

Imported iron ore prices in China (week-on-week basis)

Price includes VAT.  

Nationwide iron ore concentrate prices (66 percent Fe)

Price includes VAT. 

$1 = RMB 7.1285