Iron ore rises through Covid doubts

Seaborne iron ore prices increased further on Monday after a week of strong gains. Steel futures have begun to wobble, but raw materials prices remain firm on hopes of China’s re-opening.

The Kallanish KORE 62% Fe index increased another $3.15/tonne on Monday to $145/dry metric tonne cfr Qingdao, the highest since late April. The Kallanish KORE 65% Fe index gained $2.77/t to $168.07/dmt cfr, and the KORE 58% Fe index appreciated $3.30/t to $132.59/dmt cfr. 120,000t of Carajas Fines shipped on 31 May sold at $168.20/t.

On the Dalian Commodity Exchange, September iron ore settled up CNY 15/t at CNY 934/t ($140.54/t), while on the Singapore Exchange July 62% Fe futures settled up $1.15/t at $143.85/t. The same contract for 65% and 58% Fe futures settled up $1.14/t at $165.23/t, and up $1.07/t at $131.05/t respectively.

Chinese scrap prices have also appreciated, but billet prices, like steel futures (see separate article) have lost momentum. Grade 6mm+ heavy scrap delivered to mills in the Yangtze River Delta increased CNY 34/t from last Thursday to CNY 3,792/t. In Tangshan, billet remained flat at CNY 4,500/t.

Shanghai’s latest phase of reopening last week sent iron ore prices steadily higher, with the KORE 62% Fe index increasing $8.47/t over the week. There were some localised lockdowns on Monday however, which have sent jitters through steel markets. So far, no widespread lockdowns or cessation of business activities has occurred. Case numbers however did begin to pick up and speculators are waiting to see how local authorities react.

Tomas Gutierrez UK