Traded volumes in the 65% Fe derivatives contract on the Singapore Exchange, which is settled against Fastmarkets’ daily 65% Fe iron ore index, were 2.27 million tonnes in November, the second-highest total since its launch in December 2018. Open interest on November 28 hit a record 3.18 million tonnes.
In November (see table below), the 65%/62% spread widened to $11.11 per tonne from $7.12 in October, which suggests larger margins for steelmakers and increased demand for high-grade material against a backdrop of generally falling iron ore prices.
Another important change in November was a swing to a premium from a discount in the 66% Fe concentrates market against the 65% Fe index - a sign of relatively stable demand for higher grades.
“Steel prices were sustained by good demand last month, which allows mills to buy high-grade iron ore products, including Carajas fines, lump, pellets and...