Iron ore hits 2022 low

Seaborne iron ore prices fell slightly on Monday, as a plunge in Chinese steel futures hit sentiment. Values thus continued their decline from last week and hit a 2022-low on Monday.

The Kallanish KORE 62% Fe index lost $0.57/t to $112.32/dry metric tonne cfr Qingdao. The Kallanish KORE 65% Fe index was $0.59/t lower to $125.96/dmt cfr, but the KORE 58% Fe index rose $0.14/t to $101.36/dmt cfr.

On the Dalian Commodity Exchange, September iron ore settled down CNY 22/t ($3.28/t) at CNY 744/t, while on the Singapore Exchange August 62% Fe futures settled down $2.89/t at $110.02/t. The same contract for 65% Fe and 58% Fe futures settled $2.91/t lower at $123.30/t, and lost $0.16/t at $101.32/t respectively.

Scrap and billet prices both slumped on the weak market. Grade 6mm+ heavy scrap delivered to mills in the Yangtze River Delta lost CNY 62/t to CNY 3,144/t. Tangshan billet declined CNY 100/t over the weekend and decreased CNY 60/t on Monday to CNY 3,760/t.

The iron ore market has temporarily lost demand support, and many Chinese steel mills continue to expand overhaul plans. But pressure on the supply side keeps rising. SMM data show that a total of 11.81 million tonnes of iron ore arrived at Chinese ports during 4-11 July, an increase of 0.97mt from a week ago and a lift of 1.77mt from the same period last year.

BHP’s first shipment of yuan-based spot trade iron ore to dock at Rizhao Port berthed on 10 July, marking the official start of BHP’s port-side RMB iron ore trade. The miner expects to develop both USD trade and RMB trade in China to improve iron ore sales.

Kallanish Asia