China: Spot Iron Ore Fines Index Climbs to USD 108 on Supply Concerns

Spot iron ore fines Fe 62% index has picked up and was recorded at USD 108/MT, CFR China today. Prices increased amid supply constraints from world's largest iron ore miner Vale and fall in iron ore inventory at Chinese ports. The prices have picked up USD 4/MT as against being USD 104/MT, CFR China towards last weekend. The prices are hovering at 5 years high as the prices were last seen in May'14. The prices have increased by 8% W-o-W as compared to USD 100/MT, CFR China towards beginning of last week.

The Vale forecast made for rupture of Sul Superior dam continues to exert pressure on the prices. In an update on 24th May, Vale mentioned that both the slope of the Gongo Soco mine and the Sul Superior Dam are being monitored 24 hours a day and the forecast of when part of the slope will slip is being reviewed on a daily basis. Vale reinforces that there is no technical data that can confirm whether the eventual slippage will trigger a breach of the dam. .

Iron ore inventory at major Chinese ports was recorded at 131.7 MnT towards 17th May, and has dropped to lowest levels since mid Oct'17, according to data compiled by SteelHome consultancy. Also the port stock is expected to drop down to around 120 MnT by June'19. Amid low stock in China, mills are expected to continue buying expensive material to continue full-load operation. According to Mysteel consultancy data, Iron ore shipment from Brazil fell by 416,000 MT last week as of 19th May.

Dalian Iron Ore Future Hit Record High Levels

Dalian iron ore futures picked up 4.3%, hit record high levels today (27th May'19), highest since its launch in 2013, as per reports. Futures today increased to 758.5 yuan/MT.