Spot Iron Lump Premium Upticks in Week 15

Spot iron lump premium in week 15 increased marginally and stood at USD 0.168/DMT, CFR China. Last week it was assessed at USD 0.166/DMT, CFR China.

Chinese steelmakers in Tangshan were heard of restocking lump ahead the Tangshan Horticulture Exposition amid government’s mandated sintering reductions.

However, comparatively cheaper substitutes – pellets, market participants are hesitant over further increase in lump premium in the near term. Also some buyers are likely to shift from lump to concentrate as the domestic production of the latter is seen rising.

Trade-wise:

1. Rio Tinto sold 70,000 MT Australian Pilbara blend lump (Fe 62%) through spot tender at + USD 0.1685/DMT over May average iron ore index for end Apr’16 loading
2. BHP Billiton sold 90,000 MT Australian Newman blend lump (Fe 63%) at +USD 0.171/DMT over May average iron ore index for end Apr’16 loading

Spot pellet premium stable at USD 16.5/DMT

In week 15, spot pellet premium for Fe 65% BF grade pellets remain unchanged at USD 16.5/DMT, CFR China.

Market participants in Tangshan reported that increasing lump premium has favoured pellet sales in spot market.