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Iron ore prices once again outperformed many commodities, and the prices rose significantly in the international market. The prices of the CME Index reached above US$97, which in turn, marked a third consecutive 52-week high. The prices first rose till US$96.13 (close on 16th May) to mark the first 52-week high an eventually surged to the level of US$97.10 (Dayâs high on 17th May 2019).
The prices now breached the level of US$97 and are currently trading at US$97.54 (as on 20th May 2019 AEST 3:46 PM), up by 1.23% or by US$1.20 as compared to its previous close.
Another benchmark index of iron ore followed the same trajectory, and the prices in China initially rose till RMB 660 (as on 15th May); however, the shortage in the supply chain further pushed up the iron ore prices by RMB 20.50, and the prices settled at RMB 680.50 (as on 16th May) on Dalian Commodity Exchange.
A recent devaluation of the Chinese yuan coupled with fall in iron ore supply further catapulted the prices in China, the benchmark index settled at RMB 707 (as on 20th May 2019), up by RMB 26.50 or 3.89% as compared to its previous close.
The shipment and arrival across the Chinese ports of Iron ore marked a sixth consecutive week of decline, which concerned the mills in China over potential supply disruption in the global market.
As per the data, the iron ore inventory across the 35 Chinese ports declined by 0.83 million tonnes and stood at 123.67 million tonnes ( for the week ended 17th May 2019), down by 0.67% as compared to the 124.50 million tonnes reported for the week ended 10th May 2019.
The decline further marked a loss of 830,000 metric tonnes of iron ore inventory as compared to the previous week and 21.13 million metric tonnes, as compared to a year ago.
The decline in inventory coupled with steady demand from the topmost steelmaking provinces in China- Tangshan supported the iron ore prices in Chinaâs domestic market.
Tangshan provinces in China, which was originally estimated by the market participants to curb the output, marked a much smaller rate of output control than was expected by the market, which in turn, increased the daily average delivery of iron ore in the provinces, and supported the prices.
As per the data, the daily average iron ore delivery in Tangshan remained above 300,000 metric tonnes a day. The fall in supply, along with a sixth consecutive decline in the shipments, supported the iron ore prices.
Steel prices in China further inched up with Shanghai Future Exchange (SHFE) steel rebar (RB1910) settled at RMB 3771 a tonne on 17th May 2019, up by 0.77% as compared to its previous close of RMB 3704 a tonne.
In a nutshell, a sixth consecutive decline in the iron ore shipments coupled with lesser suspension on millsâ activities in Tangshan than expected and high steel prices (which increased deliveries) in China supported the iron ore prices and the prices marked a third consecutive 52-week high.
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