A tighter supply-demand balance for iron ore at Chinese ports coupled with sharp price decreases in the seaborne market have led to the steelmaking raw material being sold at large premiums at the docks in China.
Fastmarkets’ implied China port price for 62% Fe iron ore fines, fot Qingdao was $10.18 per tonne higher than its index for 62% Fe iron ore fines, cfr Qingdao on August 5. This is the widest the gap has been since Fastmarkets launched its index for port stocks in March 2015.
In August, the port price was higher than the 62% Fe index for seaborne materials by an average of $6.75 per tonne.
This contrasts with the first seven months of this year, when the index for seaborne iron ore was the higher number – by an average of $1.55 per tonne.
Trading activity at ports in China – biggest consumer of the steelmaking raw material in the world – has boomed over the last 5-6 years, with stockpiles breaching the 100-million-tonne mark in 2014.
Relatively high stock levels at these ports had insulated steelmakers in China from bearing the full brunt of…