Iron ore firms to new record

Seaborne iron ore prices were driven to new highs on Friday on signs of renewed buying. Port stocks were building very slowly last week, but could accelerate.

The Kallanish KORE 62% Fe index gained $3.09/t to a record $181.58/dry metric tonne cfr Qingdao. The Kallanish KORE 65% Fe index increased $1.51/t to $214.59/dmt cfr, and the KORE 58% Fe index fell $1.65/t to $154.49/dmt cfr. 190,000 tonnes of Yandi Fines, 100,000t of PB Fines and 70,000t of PB Lump sold at floating prices.

On the Dalian Commodity Exchange September iron ore settled up CNY 5.5/t at CNY 1,097/t ($169.12/t), while on the Singapore Exchange May 62% Fe futures settled up $2.07/t at $181.06/t. The same contract for 65% Fe and 58% Fe futures settled up $2.11/t at $215.88/t, and up $0.46/t at $156.50/t respectively. In Tangshan, billet prices gained CNY 10/t to CNY 4,950/t.

Iron ore port stocks increased last week, according to data from SMM. Across 35 ports stocks were up around 240,000t to 126.78 million tonnes. The increase came as mills aimed to delay their restocking amid very high prices. Lower arrivals at Chinese ports however meant the increase was not large. Mills are expected to take more materials from port stocks ahead of the 1-5 May Labour Day holiday in China. Shipments into ports are also expected to tick higher, however.

Expectations that mills will be drawing down inventories over the coming week helped give confidence to buyers of seaborne cargos. This caused an increase in deal making on the COREX exchange. Firm steelmaking margins also continue to support high prices.

Tomas Gutierrez UK