Spot iron-ore prices continue to gain, swaps decline

SINGAPORE (Scrap Monster): The spot iron ore prices gained for the fourth consecutive day on Monday. However, an expected 30% decrease in steel output, due to severe power shortage in China, weighed on forward swaps.

Key iron ore indexes, based on Chinese spot prices, rose for a fourth day on Friday after losing around 6 percent last month.

The Steel Index's 62 percent benchmark .IO62-CNI=SI rose 50 cents to $173.10 a tonne and Metal Bulletin's similar gauge .IO62-CNO=MB gained 72 cents to $172.71.

Platts 62 percent index IODBZ00-PLT rose 25 cents to $174.00. Indian ore with 63.5/63 percent iron content was quoted at $179-$181, Chinese consultancy Mysteel said, while Umetal quoted prices at $178-180 unchanged from Friday.

However, the prices of forward swaps mostly declined due to expected decreased steel output in China, which would affect future steel output, as well as prices. The Singapore Exchange-cleared June contract fell $1.00 to $172.50 a tonne, July dropped $1.58 to $171.50 and August lost $1.75 to $170.67.

China is facing worst power shortages in some of major growing cities. So far, no production cuts or shutdown in steel has been come forward. But if the situation worsens, China, being the world’s largest steel producer, can face some serious concerns…..read more on this