Iron ore prices roar higher on market return

Seaborne iron ore prices jumped on Monday as the return of China from the October holiday led to more spot cargo bookings.

The Kallanish KORE 62% Fe index leapt $15.15/tonne to $136.88/dry metric tonne cfr Qingdao. The Kallanish KORE 65% Fe index gained %13.76/t to $158.35/dmt cfr, and the KORE 58% Fe index increased $18.36/t to $108.83/dmt cfr. A total of 170,000t of Carajas Fines shipped on  8 October traded at $160/t. A total of 120,000t of PB Fines and 80,000t of Yandi Fines traded at floating prices.

On the Dalian Commodity Exchange, January 2022 iron ore settled up CNY 22/t at CNY 771/t ($119.57/t), while on the Singapore Exchange November 62% Fe futures settled up $10.79/t at $135.44/t. The same contract for 65% Fe and 58% Fe futures settled up $10.15/t at $157.15/t, and up $7.03/t at $96.99/t respectively.

Chinese scrap and billet prices have also been strong. Grade 6mm+ heavy scrap delivered to mills in the Yangtze River Delta increased CNY 15/t to CNY 3,772/t on Monday. In Tangshan, billet prices were up CNY 20/t on Saturday and then stable through Monday at CNY 5,330/t.

Steel market sentiment has strengthened as China returned from the October holiday. End user demand has picked up due to seasonally stronger construction activity. Steel output meanwhile is also recovering from late-September’s multi-year low (see related article).

Sentiment had improved sufficiently that a number of spot iron ore deals began to emerge. Benchmark 62% Fe iron ore is now at its highest level since 7 September.

Tomas Gutierrez UK