Spot iron lump premium has witnessed increase of 14% W-o-W and has moved up to USD 0.1225/dry MT unit, CFR China. Last week it was observed at USD 0.1075/dry MT unit, CFR China.
The prime reasons behind rise in spot lump premium are supply concerns, iron ore purchases by steel mills post holidays and environmnetal concerns.
Iron ore supply to China was adversely impacted by damages caused at Australia’s Port Hedland and Brazils’s Samarco mine. Another factor which pushed up the prices was purchases by steel mils after they returned from holidays. Apart from this, steel mills situated in and within 100 km of Tangshan may be forced to cut around 30% on their sintering products forcing them to raise their lump purchases.
Thus, owing to above mentioned reasons lump premium has moved up further this week.
Pellet premium remains stable
Pellet premium for Fe 65% BF grade pellets remained unchanged at USD 14/ dry MT unit, CFR China over stable offers. Since Jan’16, pellet premium has moved up USD 3/dry MT unit, CFR China. As per market sources pellet is receiving decent buying response as steel mills are seen preferring high grade materials.
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