China’s steel mills lift use of better quality PB fines
Improvements Rio Tinto has made to its mainstay Pilbara Blend fines iron ore product resulting in higher Fe content and fewer impurities are winning customers back to PB fines, Chinese market sources noted. The blend is regaining popularity among Chinese steel mills, at a time when supplies of Brazilian fines such as Carajas fines are tight, they said.
A Shanghai-based iron ore trader confirmed that the Fe content in a recently arrived cargo of PB fines averaged close to 61.9% while the alumina and silicon contents were reduced to 2.1%-2.2% and 3.3%-3.4% respectively. This was better than its previous cargoes where the Fe content was under 61.5% and alumina content higher than 2.3%.
“Many Chinese mills including us have raised the feeds (ratio) of PB fines in sintering, as higher-grade and low-alumina Brazilian fines in Shandong are in tight supply and thus rather pricey,” an official from a steel mill in East China’s Shandong province said. “At the same time the cargoes of PB fines we’ve received recently have had higher Fe content and lower alumina and silicon impurities,” he explained.
A procurement official from a steel plant in North China’s Hebei province confirmed their plan to increase the proportion of the PB fines in sintering to replace some Carajas fines, as the latter is “too expensive at present”.
Mysteel’s price of the 65% Fe content Carajas fines was Yuan 690/wmt FOT and including 16% VAT at Qingdao port, Shandong, as of July 24, with its premium against 61.5% PB fines also at Qingdao port remaining at Yuan 226/wmt at the same day, just Yuan 5/wmt below the ten-month high it reached on July 18.
A Shanghai-based iron ore analyst also indicated that port inventories of Brazilian fines have shown a clear decline since the March. Mysteel’s latest data confirms this, showing that stocks of Brazilian iron ore at 45 surveyed ports nationwide had decreased to 24.7 million tonnes as of July 19 from 36.9 million tonnes on March 1.
In the meantime, the improved quality of PB fines – including the lower alumina – is also enticing steel mills to return to this product.
“Besides the higher Fe content, low alumina content is another important consideration guiding the iron ore procurement policies of the mills given the reduced availability of low-alumina iron ore products currently,” the analyst also explained. “The reasons for tight supply include the decrease in Chinese domestic iron ore output and Brazilian iron ore shipments – both low-alumina products – and the overall increase in alumina content in Australian iron ore products these past several months.”
As of Tuesday, offer prices of these higher-grade PB fines were around Yuan 470/wmt in East China’s Shandong province and Yuan 475/wmt in North China’s Hebei province, both in terms of FOT and including 16% VAT, according to a Shanghai-based market watcher.
For the immediate future, the analyst expected that the price of the higher-quality PB fines still had room to rise further. “After all, PB fines are the most traded products in the Chinese iron ore market, with many steel mills using the blend. And on Monday a new deal for a seaborne cargo of PB fines was still concluded at a discount of $0.5/dmt against the September 62% iron ore index,” the penalty Rio had suffered when the Fe content and alumina content in its PB fines product was lower and higher than currently respectively, he explained.
Written by Victoria Zou, zyongjia@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
FMG ships 47.5 mln t of iron ore in Jul-Sept, up 4.2% YoY
Oct 27, 2022 12:00
BHP's iron ore unit cost climbs 13% on year in FY22
Aug 16, 2022 18:30
Vale's Q2 iron ore fines prices down, but costs rise
Jul 29, 2022 17:30
FMG raises its FY'23 iron ore shipments to 187-192 mln t
Jul 28, 2022 13:00
FMG's Apr-Jun iron ore production table
Jul 28, 2022 08:54