Iron ore prices hold steady in physical market, while the futures fell: KATM Exclusive

13 November 2017

Spot iron ore prices for delivery to China’s Qingdao port stood at $62.32 per tonne, according to Metal Bulletin. Seemingly, the iron ore prices have steadied over the week as the increased global supply kept the pressure on.

Moreover, steel mills across northern China, along with other industrial plants, had been ordered to curb output for four months from mid-November to limit smog during the cold season. This has resulted in the iron ore prices falling more than 10% since September.

Futures trade

At Dalian Commodity Exchange, the most traded iron ore contract for January delivery closed down 1.4% at 462.50 yuan ($70) a tonne.

Most traded coke future on the Dalian Commodity Exchange declined 3.4% to 1,826.50 yuan per tonne, after touching a three-week high on Thursday.

On to steel, the most active steel rebar contract on the Shanghai Futures Exchange moved slightly higher by 0.3% to 3,796 yuan a tonne.

Steel outlook

As per Wood Mackenzie report, China’s pollution cuts will cause steel demand to be cut by 9.6 million tonnes in the fourth quarter, depressing steel prices. Furthermore, this Chinese policy of production curbs may cause pig iron supply to be cut by 14.2 million tonnes in Q4 2017, and 20.2 million tonnes in Q1 2018.