Prices for 62% Fe iron ore
averaged $102.49 per tonne cfr last month - a 10% month-on-month increases - while those for 65% Fe products
averaged $115.45 per tonne cfr - 5.6% higher.
These movements narrowed the price spread between the two grades of iron ore to around $13 per tonne from about $16 per tonne previously.
The Singapore Exchange’s 65% Fe swaps contract - which is settled against Fastmarkets’ daily index for iron ore 65% Fe Brazil-origin fines, cfr Qingdao - experienced a lot of momentum. More than 5.50 million tonnes worth of the contract were traded in June, a record high.
A derivatives trader in Beijing said the flexibility in the quotation periods for cargoes of iron ore concentrate had driven up demand for the 65% Fe contract, with traders using the contract to hedge their risk. In addition, traders use the 65% contract to manage their inventories...