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1. Iron
Ore Market
1.1 Market
in Brief
Seaborn iron ore prices dropped in China last week by
and large. Mills started to purchase iron ore which would arrive at
China’s ports in December, bringing the overall transactions to further
increase on the seaborne markets.
On the spot market, the price dipped. For mills, most
of them purchased iron ore only for rigid demand. In order to improve
cash flows, traders focused on iron ore sales.
According to SteelHome survey, the spread between PB
fines and Super Special fines narrowed, bringing the former more cost
effective.
T1: China Iron Ore Price by
Product
|
|
SteelHome Index (USD/t) |
Seaborne Price (USD/t) |
Qingdao Port (yuan/t) |
Tangshan (yuan/t) |
|
62%-Fe
Imported Iron Ore |
61.5%-Fe PB fines |
65%-Fe
IOCJ |
61.5%-Fe PB fines |
56.5%-Fe Super Special fines |
66%-Fe
Concentrate fines |
|
October 23 |
117.39 |
116 |
985 |
860 |
790 |
1030 |
|
October 16 |
119.34 |
118 |
985 |
880 |
805 |
1030 |
|
VAR |
-1.95 |
-2 |
- |
-20 |
-15 |
- |
Source: SteelHome Database
*Need More Data? Just
Click SteelHome
Database (Microsoft's Windows Version)
1.2
Seaborne Transactions
Seaborne iron
ore transaction was 1.73 million tonnes during October 19-23, up by 32%
week on week.
T2: Seaborne Iron Ore Transaction
|
Date |
Product |
Volume
(10,000 Tons) |
Price
(US$/dmt) |
Note |
|
2020/10/19 |
Jimblebar fines |
8 |
December 62%PM average index-1 |
globalORE bidding price, arrival at ports in December. |
|
2020/10/20 |
Yandi fines |
11 |
September 62%PM average index+2.05 |
globalORE bidding price, arrival at ports in December. |
|
2020/10/20 |
65%-Fe IOCJ |
19 |
133 |
COREX bidding price, with B/L on October 5. |
|
2020/10/20 |
PB fines |
17 |
November 62%Platts average index+3.4 |
globalORE bidding price, with laycan during November 5-14. |
|
2020/10/20 |
PB fines |
17 |
November 62%Platts average index+3.4 |
globalORE bidding price, with laycan during November 6-15. |
|
2020/10/21 |
PB fines |
9 |
November 62%Platts average index+2.1 |
COREX bidding price, with laycan during November 8-17. |
|
2020/10/21 |
PB lump |
8 |
November 62%Platts average index+lump premium |
COREX bidding price, with laycan during November 8-17. |
|
2020/10/21 |
Newman lump |
7 |
December 62%Platts average index+lump premium |
COREX bidding price, with laycan during December 1-10. |
|
2020/10/21 |
Newman fines |
10 |
December 62%PM average index+3 |
COREX bidding price, with laycan during December 1-10. |
|
2020/10/22 |
PB fines |
17 |
November 62%Platts average index+2.85 |
COREX bidding price, with laycan during November 22-December 1. |
|
2020/10/22 |
Newman fines |
8 |
November 62%PM average index+3.5 |
COREX bidding price, with laycan during November 6-15. |
|
2020/10/22 |
PB fines |
17 |
November 62%Platts average index+3.3 |
COREX bidding price, with laycan during November 3-12. |
|
2020/10/22 |
Yandi fines |
8 |
December 62%PM average index+2.3 |
globalORE bidding price, arrival at ports in December. |
|
2020/10/23 |
62-Fe BRBF |
17 |
115.7 |
globalORE bidding price, with laycan during November 13-22. |
1.3
Inventory at Main China’s Ports
According to SteelHome survey, iron ore inventory at
46 main Chinese ports was 127.8 million tonnes as of October 22, 2020,
up 3.3 million tonnes from October 15.
Of the stocks, about 59.6 million tonnes belong to
traders. The stocks comprise 26.2 million tonnes of lump, 11.25 million
tonnes of pellet and 12.9 million tonnes of concentrate fines. Daily
shipment was 2.93 million tonnes, down 160,000 tonnes from the previous
week.
Meanwhile, daily iron ore arrivals at five largest
Northern ports (Qingdao, Rizhao, Tianjin, Caofeidian and Jingtang)
reached 1.8 million tons this week, up 110,000 tons from last week.
More details, please go to…>>
1.4
Inventory in Steel Mills
From SteelHome survey in North China, iron ore
stockpiles would support around 16 days’ consumption in the leading
local steel mills. Alongside
Yangtze River, iron ore stockpiles remained at around 25-30 days’
consumption in long-term contract steel mills, and at around 20-23 days’
consumption in mills who purchase iron ore mainly in spot market.
1.5
Forecast & Trading Tips
Factors
causing iron ore price to drop: (a) stricter production curbs in winter
days; (b) further rise on portside iron ore stockpiles.
Therefore, SteelHome
considers that prices of 62%-Fe imported iron ore would be at 111-116
dollars per tonne in the near term.
Trading Tips: traders are
suggested to properly sell iron ore products. Mills are suggested to
keep the in-plant inventory at a normal consumption level.
2. Semis
Market
2.1 Price
& Inventory
Prices of
semis edged up in China last week. The demand for semis increased amid
active production in steel rolling mill plants, and the stockpiles kept
dropping in China. For traders, most of them were active in sales.
Semis stocked at 16 large
warehouses in Tangshan were 383,100 tonnes on October 22, 2020, down
around 78,600 tonnes from October 15, 2020.
T3: China Domestic Semis Price
|
in
Yuan per tonne |
Shanghai |
Jiangsu |
Shandong |
Fujian |
Guangdong |
Henan |
Hebei |
Shanxi |
Liaoning |
|
October 23 |
3560 |
3500 |
3480 |
3510 |
3600 |
3490 |
3440 |
3470 |
3440 |
|
October 16 |
3540 |
3470 |
3470 |
3490 |
3580 |
3450 |
3400 |
3430 |
3400 |
|
VAR |
↑20 |
↑30 |
↑10 |
↑20 |
↑20 |
↑40 |
↑40 |
↑40 |
↑40 |
T4: Tangshan Semis Inventory
|
in
10,000 tons |
Sep. 3 |
Sep.
10 |
Sep.
17 |
Sep.
24 |
Sep.
30 |
Oct. 9 |
Oct.
15 |
Oct.
22 |
|
Inventory |
71.97 |
75.41 |
72.79 |
63.24 |
53.39 |
50.67 |
46.17 |
38.31 |
|
VAR |
1.87 |
3.44 |
-2.62 |
-9.55 |
-9.85 |
-2.72 |
-4.5 |
-7.86 |
2.2
Profits
In last week,
prices of coke increased, while iron ore prices dropped in Tangshan.
Therefore, the calculated cost of semis was about 2,927 yuan/t without
tax, down by 15 yuan/t from the one in week prior, bringing gross
profits around 100 yuan/t for semis suppliers.
2.3
Outlook & Trading Tips
Factors
causing semis price to fall: (a) steel stockpiles still at lofty
heights; (b) demand for semis to decrease amid production curbs in
Tangshan’s steel rolling mill plants.
Factors
causing semis price to rise: (a) recovering steel demand; (b) great
macro fundamentals.
SteelHome considers that
prices of semis would edge down, with range around 30 yuan/t during the
week.
Trading tips: consumers are
suggested to purchase semis products mainly as needed in the near term
amid escalating trade uncertainties. |
