Offers of spot iron ore rose 5-10 yuan/mt on Monday May 14 as prices of futures continued to perform strongly. The most liquid contract on the Dalian Commodity Exchange gained nearly 2.2% to close at 488 yuan/mt.Transactions of Pilbara Blend fines were done at 470-480 yuan/mt in the Shandong area while transactions were done at 480-485 yuan/mt in Tangshan area, Hebei province. Traders were keen to sell while steel mills kept on the sidelines?as the week had just begun.
Steel mills are likely to see rebar?profits?over 1,100 yuan/mt and hot-rolled coil?profits over 1,300 yuan/mt as of Monday May 14 on iron ore of?$67.8/mt. The widening profit margins drove up steel mills’ demand?for high-grade iron ore, which supported prices of spot iron ore at ports.Supplies of Pilbara Blend fines and Newman fines remain relatively tight despite the limited increase in inventories at major ports, a trader in north China said.
The widening price spreads between high?and low-grade iron ore also reflected high demand?for high-grade iron ore across steel mills. At Qingdao port, the price spread between Pilbara Blend fines and Fortescue Blend?fines rose to 146 yuan/mt as of Monday May 14 from 139 yuan/mt a month ago, while the price spread between Pilbara Blend fines and Super Special fines increased to 182 yuan/mt from 164 yuan/mt.In the short term, high-grade iron ore prices to are likely to stay firm with upward room and to continue their strong,?rangebound patterns.
Iron Ore Port Index stood at 484 yuan/wmt fot Qingdao on Monday for 62% Fe fines, up 1 yuan/wmt from Friday May 11.?The index for 58% Fe fines was up 7 yuan/wmt to 330 yuan/wmt while the index for 65% Fe fines was up 2 yuan/wmt to 579 yuan/wmt.
Source :SMM news