Iron ore rebounds ahead of economic data

Seaborne iron ore prices picked up on Thursday as ferrous markets continued to bounce around a range driven by fluctuating sentiment. Chinese imports suggest steady supply, but sentiment will remain a key driver as data on the wider economic situation emerges.

The Kallanish KORE 62% Fe index increased $2.06/t to $125.81/dry metric tonne cfr Qingdao. The Kallanish KORE 65% Fe index gained $2.79/t to $149.25/dmt cfr, and the KORE 58% Fe index inched $0.92/t higher to $95.65/dmt cfr. 170,000 tonnes of Carajas Fines shipped on 5 October sold at $150.60/t, and 90,000t of Jimblebar Fines sold at a floating price.

On the Dalian Commodity Exchange January 2022 iron ore settled down CNY 27.5/t to CNY 730.5/t ($113.55/t), while on the Singapore Exchange November 62% Fe futures settled up $2.37/t at $123.58/t. The same contract for 65% Fe and 58% Fe futures settled up $3.82/t at $147.53/t, and down $1.22/t at $93.30/t respectively.

Chinese scrap prices began to feel the weight of falling prices in recent days, with some mills lowering purchase prices which had only just been hiked. Billet prices, however, took a pause amid an uncertain market. 6mm+ heavy scrap delivered to mills in the Yangtze River Delta fell CNY 11/t to CNY 3,821/t. In Tangshan, billet prices held steady at CNY 5,250/t.

China’s iron ore imports have been coming in fairly steadily over the last two months. Although September imports were down on-month, when adjusted to imports by day they were up slightly on-month. China iron ore imports in September were 95.611 million tonnes, down from 97.492mt in August and 108.55mt a year earlier, according to Chinese customs data. Over nine months, imports were 841.953mt, down 3% year-on-year.

The physical market is expected to loosen over the rest of the year, but this is one of the more predictable aspects of the market. Sentiment, about steel and iron ore markets in particular, and the Chinese economy more generally, is expected to be highly volatile. Monday will see a test of sentiment as economic data for September and the third quarter is released.

Tomas Gutierrez UK