The price spread between 62% Fe and 65% Fe iron ore fines reached a historical high in March as a result of various factors, according to market sources.
Fastmarkets' index for
iron ore 62% Fe fines, cfr Qingdao was at $159.85 per tonne on Thursday March 25 while that for
iron ore 65% Fe Brazil-origin fines, cfr Qingdao was at $190.40 per tonne.
The spread between the two indices rose to a historical high of $30.55 per tonne that day.
Here are five factors that market sources cited for this development.
1. China's steel production curbs
China's Ministry of Industry & Information Technology (MIIT)
announced its draft masterplan of policies for the ferrous sector in its 14th Five-Year Plan on December 31 last year, which placed emphasis on keeping emission levels low.
Part of the strategy for reducing emissions involve crude steel production cuts in 2021, which prompted a bearish outlook for iron ore.
Prices for the mid- and low-grade iron ore were directly affected because sintering restrictions are typically introduced as part...