Spot iron lump premium has been showing a bullish trend since beginning of 2016 and has increased nearly three times in span of 16 weeks.
Spot iron lump premium increased further this week to USD 0.1825/DMT CFR China in week 16. In previous assesment, spot iron lump premium was recorded at USD 0.168/DMT, CFR China.
Factors which have led to increase in lump premium:
Lesser availability of lump in Chinese major ports: Iron ore stock at major ports in China declined ans was recorded at 96.8 MnT (as on 15 Apr’16) down by 1.1 MnT against previous week’s assessment of 97.9 MnT.
Stock of lump in major Chinese ports summed up to 11.7 MnT (as on 18 Mar’16). Lump stocks in Chinese major ports have declined in a month’s time and were recorded at 11.3 MnT (as on 15 Apr’16).
Strict environmental controls: Steelmakers in northern China were heard of restocking lump ahead the Tangshan Horticulture Exposition amid government’s mandated sintering reductions.
Trade-wise:
- Rio Tinto sold 70,000 MT Australian Pilbara blend lump (Fe 62%) via spot tender at a premium of USD 0.1808/DMT over May’16 average. Cargo loading will take place from 03 May-12 May’16
- BHP Billiton sold 90,000 MT Newman Blend lump (Fe 63%) at USD 0.1881/DMT over May’16 average. The loading of the cargo will take place from 06 May’16-15 May’16
Pellet premium up to USD 18/DMT, CFR China
Spot pellet premium for Fe 65% BF grade pellets increased by 9% W-o-W in week 16 of 2016. Premium was assessed at USD 18/DMT, CFR China in week 16 ainst its previous week’s assesment of USD 16.5/DMT, CFR China.
With increasing demand for concentrate backed by high margins in steel production, pellet buying has also observed strength.
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