Iron ore price, page-2875

Wow, another 5% turn around in one day for IO Future. This morning was up 3% and finished down 2%. Crazy stuff, I think spot market will most likely ignore this and set their price depends on demand.

As we all know, due to the high price of coking coal, steel mills are tend to use higher grade IO to maximise steel output, therefore when coking coal future falls, IO future also falls. Now we have Coke and Coking Coal Futures falling over 3%, Steel Rebar and Hot Roll Futures rising, and poor IO Future is stuck in the middle.

Mid / Lower grade IO have been selling quite well last week, due to the price advantage of lower grade IO, steel mills can save over 250 yuan per ton by using lower grade IO. Steel and Billet Inventories have been fallen for like 2 months until 2 week ago and we only started to see the inventories stabilise and increase last week, which mean steel mills are not pressure to maximise steel output so now they will most likely to increase their use of 58% IO and hence reduce the cost of making steel.

I'm hoping this will be the case this month, with 62% and 65% IO comes down a bit and 58% IO stay the same or increase a bit, to bring FMG's discount back to less than 20%.

Last week, FMG's 58% and 56% IOs was ranked 2nd and 5th in the best sellers of IOs, with mid and lower grade IOs both have increased sales volume.

Last week on average, price difference between:
- PB Fine and FMG 58% -> down
- PB Fines and FMG 56% -> down
- FMG 58% and FMG 56% -> same

I just had these prices for today:
- FMG 58% 450 yuan up 10 yuan Qingdao Port (this morning)
- Shanghai Rebar 4180 yuan up 60 yuan over last Friday
- Shanghai Hot Roll 4380 yuan up 150 yuan over last Friday

Market all over the place ATM, spot up and futures down, maybe later night we'll get another surprise from IO Future, who knows.

DYOR.

Frank.