Australia: FMG Lowers Low-Grade Iron Ore Discount Further for Aug’19

Fortescue Metals Group - world's 4th largest iron ore producer has reduced the sub-grade iron ore discount for SSF (super special fines) for Aug’19. SteelMint has learned from the market participants that FMG lowered its discount stable for SSF low-grade fines for the month of Aug’19 to 6% from 7% in Jul’19.

As per the reports, Chinese steel mills are using more lower-grade iron ore amid tight supply and Tangshan production cuts. Despite there is narrow margin between medium grade ore and low-grade iron ore.

Spot iron ore fines index increases towards week-end -: Spot iron ore prices increased sharply amid shortage of supply concerns, Fe 62% fines increased USD 6/MT to USD 122/MT CFR China M-o-M in Jul’19 against USD 116/MT, CFR, China a month before. On weekly basis, iron ore fines price increased by USD 3/MT against USD 119/MT CFR China a week before.

Lowering of discounts on low grade is expected to benefit Indian low-grade fines exporters. Indian iron ore export volumes for Q1 FY20 (Apr-June'19) stood at 5.21 MnT, up significantly as against 2.15 MnT in the previous quarter. Increased Chinese demand and high global prices resulted in an increase in Indian iron ore exports.