Iron ore surges to one-year high

Seaborne iron ore prices surged on Monday. Strong expectations for China’s steel demand in the coming months, and an expected slowdown in deliveries to ports, were fuelling speculative trading.

The Kallanish KORE 62% Fe index jumped $5.91/t to $115.35/dry metric tonne cfr Qingdao, the highest since 1 August 2019. The Kallanish KORE 65% Fe index gained $4.94/t to $125.90/dmt cfr, and the KORE 58% Fe index surged $4.38/t to $103.88/dmt cfr. 110,000 tonnes of Newman Fines sold at $116.3/t with a laycan in 21-30 August.

On the Dalian Commodity Exchange September iron ore settled up CNY 24/t at CNY 861.5/t. On the Singapore Exchange September 62% Fe futures settled up $4.52/t at $110.46/t. The same contract for 65% Fe and 58% Fe futures settled up $4.32/t at $122.43/t, and up $3/t at $102.67/t respectively.

Confidence in Chinese steel markets remains strong and that has meant mills are keen to top up their stocks from ports. Seaborne deliveries to ports, meanwhile, are expected to pull back slightly from the levels of recent weeks due to a slowdown in shipments from Australia and Brazil in July. 

China is also seeing the late arrival of its typhoon season. After unusually seeing no typhoons on its shore in July, over the weekend it issued a blue alert for Typhoon Hagupit. The typhoon made landfall on Monday night but is not expected to cause significant disruption to ports.