Spot lump premium continuous to strengthens upon strong steel margins as well as tighter lump availability.
In Week 17, seaborne lump premium moved up by 14%. It was 0.2075/DMT, CFR China in week 17.Now, in week 18, spot lump premium increased marginally and is assessed at USD 0.2080/DMT, CFR China.
While, global iron ore fines Fe 62% fines prices dropped down at USD 65/MT, CFR China after a recent hike of USD 4/MT within this week, lump premiums were still increased marginally upon strong production margins.
Currently, Chinese steel mills using blast furnace route to produce steel are preferring high grade ore to feed their blast furnaces, and as prevailing shortage of pellet in China upon destruction of Samarco project which supplies around 11 MnT pellet to China, usage of high grade lumps would be best choice for Chinese mills. This led to continuous increase in lump premium.
Alongside, there were also thin availability of lumps at major stock ports. Stock of lump cargoes was recorded at 11.3 MnT on 15 Apr’16. The figure declined to 10.5 MnT by the end of this week (as on 29 Apr’16).
Spot pellet premium remains stable at USD 21/DMT
In week 18, spot lump premium remained stable at USD 21/DMT, CFR China for Fe 65%BF grade pellets. In week 17, pellet premium escalated by USD 3/MT W-o-W and touched to USD 21/DMT.
Premium is highest since Oct’15 as many transactions been done at Chinese stock market of seaborne pellet. Meanwhile, world’s a major miners are preferring exporting pellet to countries like Japan and Korea because of high pellet premium available in these countries.
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