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Kallanish Kallanish

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September, 29th 2020

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AUG 13
17:20

Iron ore fluctuates but prices expected to firm

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Seaborne iron ore prices continued to fluctuate on Thursday. While uncertainty around import controls continue, high fines prices are prompting grinding of pellets back into fines.

The Kallanish KORE 62% Fe index slipped $0.61/t to $120.71/dry metric tonne cfr Qingdao. The Kallanish KORE 65% Fe index fell $1.16/t to $127.81.dmt cfr, and the KORE 58% Fe index gained $0.24/t to $106.63/dmt cfr. 170,000 tonnes of PB Fines sold at $119.35/t with a laycan in 5-14 September.

Another two 170,000t shipments of PB Fines and 80,000t of Jimblebar Fines sold at floating prices. On the Dalian Commodity Exchange September iron ore settled up CNY 4.5/t at CNY 824/t, while on the Singapore Exchange September 62% Fe futures settled down $0.63/t at $115.70/t.

There remains some uncertainty about the application of new measures on imports of commodities from Australia. Licensing will now take 11 days instead of 2-3 days previously. This applies for iron ore and coking coal, as well as other commodities. Traders have raised concerns this could cause problems when changing the destination port for a shipment. Orders that are delivered to their original port should have time to apply for licensing promptly, but last minute changes would be impractical.

Iron ore demand is expected to be sustained by high Chinese steel output. As prices have remained firm, some traders are looking at the margins on grinding pellets from stocks into fines for sale. This is expected to be a short-lived measure because of the costs associated and the limited availability of suitable grinding facilities.