China iron ore import prices hit record high

Seaborne iron ore prices for delivery to China have risen above $145/dry metric tonne (dmt) for the first time in at least seven years, as a rebound in global steel output outpaces raw material supplies.

The Argus 62pc ICX fines index rose by $6.75/dmt to $145.25/dmt today. This is the first time the ICX has exceeded $140/dmt since Argus began its assessments in May 2013.

The 65pc index rose by $6.15/dmt to $155.20/dmt, also the highest on record.

The most active iron ore contract on China's Dalian commodity exchange rose by 39.5 yuan/t ($6/t) or 4.2pc to Yn972/t today. The January 62pc iron ore paper contract on Singapore's SGX rose by $7.20/t to $139.74/t in Asian afternoon trading.

Global steel restocking demand is outpacing blast furnace restarts in the US and Europe, sending flat steel prices soaring and driving demand for iron ore. This is further tightening iron ore supply, which is already stretched by Brazilian mining firm Vale's struggles to restore 100mn t/yr of capacity and gains in Chinese steel output, which is on pace to exceed 1bn t this year.

Vale cut its 2020 iron ore production guidance by another 10mn-25mn t this week, adding to a cut of 25mn-45mn t early this year from original guidance of 355mn t in 2020.

By Chris Newman