Seaborne iron ore prices gained on the last day of 2021. Inventories are building, however, and the outlook for 2022 is weaker.
The Kallanish KORE 62% Fe index gained $1.87/t on 31 December to $119.01/dry metric tonne cfr Qingdao. The Kallanish KORE 65% Fe index increased $2.07/t to $139.81/dmt cfr, but the KORE 58% Fe index only inched $0.29/t higher to $92.83/dmt cfr. A cargo of 120,000 tonnes of PB Fines and 50,000t of PB Lump sold at a floating price.
On the Dalian Commodity Exchange May iron ore settled flat at CNY 674/t ($106.15/t), while on the Singapore Exchange January 62% Fe futures settled up $2.13/t at $121.07/t. The same contract for 65% Fe and 58% Fe futures settled up $2.44/t at $143.05/t, and down $1.35/t at $93.24/t respectively. Tangshan billet prices were steady at CNY 4,270/t.
Across 35 ports stocks increased by 1.12 million tonnes in the last week of the year to 152.07mt, according to SMM. Even with restrictions easing in January and overall steel output picking up, iron ore markets remain well supplied.
Iron ore had a spectacular year, averaging $159.43/dmt cfr over 2021, up 47.1% from 2020 and marking the second year running of average prices over $100/t. 2022 however is looking very different, with Chinese steel output remaining subdued, risks to steel demand for construction, and the threat of Omicron again disrupting markets in the near term.
