BHP raised the May monthly discounts for Jimblebar Fines and Yandi Fines while maintaining the price level for MAC Fines compared with the 62% Fe indexes, contract customers told S&P Global Platts.
MAC Fines saw its monthly price maintained at parity with the average of 62% Fe indexes, while BHP raised the discounts for Jimblebar Fines and Yandi Fines to 4% and 4.5%, respectively, in May from parity with the 62% Fe indexes in April, sources said.
These are the cheapest levels for Jimblebar and Yandi Fines since August 2020 and July 2020, respectively.
BHP did not respond to Platts request for comments by the time of publication.
As some steel production hubs in China ramped up production curbs in a bid to cut crude steel output and rein in emissions, supply tightened amid rising downstream steel demand, lifting margins for Chinese steel mills.
Platts calculated Chinese rebar and hot rolled coil cash margins around $130/mt and $160/mt, respectively — the highest in two-and-half years.
As a result, iron ore brands with lower iron content were losing traction. The Chinese steel mills subject to less stringent production curbs were looking to increase the average iron content in their ore blends to maximize hot metal output.
Jimblebar Fines has a standard iron content of 60.5% — the lowest among the five iron ore brands under the Platts medium-grade index. Yandi Fines, having a standard iron content of 57%, falls under the low-grade iron ore fines category.
Sources cited more spot cargoes of Jimblebar and Yandi Fines as another key factor weighing on their price levels. While spot supply of Newman High Grade Fines, or NHGF, was muted due to planned Ore Handling Plant and stacker maintenance at the Newman mine in Australia, spot supply of Jimblebar and Yandi Fines reached a high recently and many cargoes were sold as whole shipments, rather than the usual parcel sales.
“Jimblebar and Yandi were getting too expensive previously due to synchronized recovery in global demand. They are now returning to normal levels, as spot supply is plenty and Chinese mills’ procurement preference has moved to the medium- and high-grade products,” a China-based end-user source said.
A few end-user sources also told Platts that recent cargoes of Jimblebar Fines had inconsistent iron content, with some cargoes falling below 60% Fe content. This was in contrast to the previous situation, where a few traders were bidding up spot prices for Jimblebar Fines as the actual iron content was higher than the standard 60.5%.