The price of the Brazilian high-grade iron ore, 65 percent iron contents, is $108/mt today, against $110/mt on October 14, CFR China conditions.
The decline reportedly reflects announcements of higher quarterly volumes of iron ore produced by both Vale and BHP, raising pressure by the supply side and negatively affecting prices. The negative mood from the “Covid zero policy” in China also remains affecting iron ore prices, due to an expected reduction of steel production and consequent lower demand for the ore in the country.
The Brazilian high-grade product has now a premium of 9.9 percent in relation to the 62 percent Australian iron ore, against 9.3 percent previously, now the higher rate since June 2022 and showing an uptrend during the last months, reflecting the increased demand for premium products for their performance in blast furnaces.
The export price of blast furnace grade pellets is now $135/mt, CFR China, against $134/mt previously, reflecting also a higher premium ascribed to the product in relation to the equivalent sinter feed fines.
In the Brazilian domestic market, the prices are now estimated at $81/mt for the iron ore and $108/mt for the pellets, against respectively $83/mt and $107/mt previously, ex-works, no taxes included. Such prices are also affected by the variation of the freight rate Brazil-to China, as the base for the domestic price is the FOB equivalent price.