China portside ore narrows discount to seaborne in May

Jun 4, 2018

Portside prices of imported iron ore in China sharply narrowed their discount to seaborne prices in May, as steelmakers mostly made smaller purchases in portside markets to meet short-term needs rather than build large inventories.

The discount of Argus PCX 62pc portside fines to Argus ICX 62pc seaborne fines narrowed to an average of $1.77/dry metric tonne (dmt) in May, compared with $2.57/dmt in April and $2.63/dmt in March. The Argus PCX discount to the ICX price ranged from $1.15-3.15/dmt last month.

The seaborne equivalent of the yuan-denominated PCX price is calculated by assuming 16pc value-added tax and 8pc moisture for mainstream fines cargoes.

Portside traders were reluctant to cut offer prices last month, as the reductions did not appear to lift sales volumes. The discount on sales of PB fines in the portside market compared with the seaborne price of PB fines on the same day was around 5-10 yuan/wet metric tonne ($0.75-1.50/t) last month, compared with around Yn20/wmt in April, said market participants. The Argus-assessed PB fines price at Qingdao port fell by 2.15pc in May to Yn453/wmt.

Mills in Shandong province bought higher-than-usual amounts of iron ore from portside markets last month to prepare for sintering and trucking restrictions imposed from 31 May to 11 June because of the Shanghai Co-operation Organization heads of state meeting on 9-11 June in Qingdao, a major port city in Shandong.

Robust demand for low-alumina fines lifted the premium for yuan-denominated BRBF fines to the Argus PCX price to 4.15pc in May compared with 3.29pc in April. BRBF fines last month had the widest premium to the PCX price of all 62pc grades assessed by Argus, such as PB fines and Newman fines. The premium of Newman fines fell to 4pc to the PCX price in May from 5pc in April.

PB fines’ discount to the PCX price remained unchanged from April at 0.9pc in May. The discount of SSF fines to the PCX price widened to 39pc in May from 37pc in April. Demand for medium and low-grade fines remains weak, as mills stay focused on using more high-grade fines to keep output at near-peak levels.

Source: Argus

Source from : hellenicshippingnews