UTC+8 ( BJT)

Infograph: Iron ore prices see great volatility

The great volatility seen in Chinese iron ore prices since November has intensified this month. By December 21, Mysteel’s SEADEX 62% Fe Australian Fines, for example, had skyrocketed to $176.05/dmt CFR Qingdao, surging by $43.2/dmt from the price on December 1 – equivalent to a 52% gain so far this year. Then, just one day later, the price slumped by $9.9/dmt to $166.15/dmt.
Over July 3-November 26, though, the index had been hovering in the $100-130/dmt CFR China range. Ordinarily, ore prices might be expected to slide this month when the December cold chills steel consumption in China. 

As of December 21, China’s price of Q235 4.75mm HRC price assessed by Mysteel had increased to a new high since Mysteel started to assess this price in July 2010 of Yuan 4,994/tonne ($763/t), or up by Yuan 524/t on week.

The sharp gain in the representative iron-ore pricing index relates to Chinese steel demand and to the steel price surges in flat products globally, particularly hot-rolled coil. At the same time, Chinese market concerns about iron ore supply in Q1 – which emerge at this time every year – have also helped to buoy market confidence. 

This could explain why iron ore prices have shot up, despite complaints from the China Iron & Steel Association and efforts by the Dalian Commodity Exchange to cool down ‘speculative trading’ in the iron ore market since early December.