- PB fines (Fe 62%) prices fall faster than Carajas fines (Fe 65%)
- Lower prices of medium-grade ore prompt active trading
The price spread between high- and medium-grade iron ore widened slightly in the seaborne market last week, even as high-Fe fines lost favour with loss-making Chinese mills against cheaper medium-grade alternatives, Mysteel’s survey showed.
On 24 July, the spread between 65% Fe Carajas Fines and 62% Fe Pilbara Blend (PB) Fines was assessed by Mysteel at $15/dmt CFR Qingdao, up $0.9/dmt w-o-w.
The expansion came as PB Fines prices fell faster than Carajas Fines over the past week. As of 24 July, 65% Fe Carajas Fines at Qingdao port had dropped $1.5/dmt on week to $113.9/dmt, while 62% Fe PB Fines slipped $2.4/dmt to $98.9/dmt, Mysteel assessment showed.
Medium-grade products such as PB Fines, Newman Fines, and MAC Fines saw active trading in the seaborne market last week, with traded prices moving lower, market sources observed. PB Fines stood out, as miners eased offers to clear sales, boosting the product’s liquidity noticeably.
Trading in high-grade Carajas fines, by contrast, was decidedly thin, with only one small-vessel cargo concluded on the public platform but at a relatively high price.
“That’s the reason why the (65-62% Fe fines) price spread widened last week,” an iron ore analyst based in Shanghai explained. She also noted that actual demand for Carajas fines remained lacklustre as most mills in China continue to struggle with negative margins.
Mysteel’s survey showed that only 35% of the 247 Chinese blast-furnace steelmakers under its monitoring — or 86 producers — could make some profits on steel sales by 23 July, the lowest ratio since October last year.
Going forward, the high-medium spread is expected to narrow again, as mounting losses are set to keep Chinese mills away from pricey high-grade ores. “Buyers are shifting toward medium- and low-grade materials to rein in costs, which should lend some support to those grades,” the analyst added.
Note: This article has been published in accordance with a content exchange agreement between Mysteel Global and BigMint.
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