Iron ore rebounds on June 6, but still below $110/mt CFR and outlook not promising

Import iron ore prices in China have indicated rises today, Thursday, June 6, while posting a significant drop compared to one week ago. Rising futures prices today have supported steel and iron ore prices, while market sources believe that futures prices had fallen too rapidly and so some rebound has been awaited, especially before the Dragon Boat Festival. Nevertheless, the overall outlook has remained negative.

Iron ore fines with 62 percent Fe content have seen a rise of $2.25/mt on June 6 to $108.35/mt CFR. This level is $6.9/mt below that seen on May 30. Brazilian iron ore with 65 percent Fe has increased by $2.5/mt on June 6 to $124/mt CFR, while also down $6.9/mt week on week, SteelOrbis has learned.

54 deals for a total of 857,500 mt of iron ore were transacted on the Corex platform on June 6. 80,000 mt of 61.7 percent Newman fines were traded at $106/mt CFR for shipment during July 1-10.

During the given week, import iron ore prices have decreased significantly compared to the previous week amid the slack demand from steelmakers. At the same time, imported iron ore arrivals at ports fell in the given period, though the shipments of iron ore in the global market, from Australia in particular, have increased. More steelmakers have implemented maintenance works, signaling that demand for iron ore will continue to be sluggish. Today’s rebound in steel futures prices, which also triggered some rises in iron ore prices, has also been due to the rumors that the Chinese authorities are going to set a target for crude steel production this year to be up to 20 million mt less than last year. This points to stably weak demand for iron ore in the future.

Moreover, inventory of iron ore on the steelmakers’ side has been at a relatively high level, indicating steel mills will be cautious in concluding purchases of iron ore, even ahead of the three-day holiday. It is expected that imported iron ore prices in the Chinese market will edge down further in the coming week. 

Iron ore futures prices at Dalian Commodity Exchange have risen by 0.96 percent today to RMB 839.5/mt ($118/mt) compared to the previous trading day, June 5, while decreasing by RMB 25.5/mt ($3.6/mt) compared to May 30.

As of June 6, rebar futures at Shanghai Futures Exchange are standing at RMB 3,665/mt ($516/mt), decreasing by RMB 72/mt ($10/mt) or 1.9 percent since May 30, while up 0.64 percent compared to the previous trading day, June 5.

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 7.1108