Metals News
Be careful! Concentrate may enter iron ore futures delivery beyond expectations
Jul 17,2019
The content below was translated by Tencent automatically for reference.

SMM News: on Tuesday, the firm issued a notice saying that from July 18, 2019 trading (that is, July 17 trading section), iron ore futures trading fee standard adjusted to 1 / 10,000 of the transaction amount. Among them, the iron ore futures 1909 contract intra-day trading fee standard adjusted to the transaction amount of 2.5%, non-day trading fee standard is 1 / 10 000 of the transaction amount. The standard of intra-day trading fee for iron ore futures 2001 contract is adjusted to 1.5 / 10,000 of the transaction amount, and the standard of non-intra-day trading fee is 1 / 10 / 10, 000 of the transaction amount.


After a brief adjustment last week, as of 15:00 on July 16, iron ore futures contract 1909 closed at 905yuan / ton, up 2.38 per cent. Futures Daily reporter learned that yesterday's rise in iron ore prices, and spread in WeChat circle a "Jinbuba powder down iron content" news, temporarily aroused the bullish mood of the market. However, people concerned said that the news should not be overinterpreted, on the contrary, in the context of the existing delivery rules, according to the high price of the rules, the concentrate may exceed expectations into futures delivery should be paid more attention to.

According to reports, Jinbuba powder is BHP Billiton (BHP) launched in 2015, the current trade circulation is more common in high-quality mines. Since July 16, BHP Billiton has readjusted the typical values of some varieties, notifying individual companies to reduce the grade of Jinbuba powder iron from more than 60% to 59.5%. In this regard, some people are concerned that if Jinbuba powder into the delivery may be affected, affecting the source of some delivery. The market forecasts that the futures convenient delivery products will be adjusted from Jinbuba powder to PB powder. Driven by the above news, iron ore futures prices rose on Monday night, Tuesday's main contract closed at 905 yuan / ton.

To this end, the reporter sought confirmation from professionals. It is understood that, in fact, the Jinbuba powder adjustment of iron grade on futures prices and delivery of the impact is very limited, the current iron ore futures available for delivery is sufficient. According to statistics, the output of Jinbuba powder in 2018 is about 50 million tons, and the import volume of Jinbuba powder in China is about 45 million tons, accounting for 4% and 5% of the total iron ore import in the whole year. The impact of quality adjustment on the spot market should not be magnified.

In terms of inventory, the current inventory of Jinbuba powder in the port is less than 4% of the total port inventory. As of July 9, Qingdao, Rizhao, Caofeidian and other major delivery ports of Jinbuba powder inventory of about 2.3 million tons, accounting for about 8% of the high-grade powder mine inventory. In the same period, the port stock of PB powder, which is of similar quality, is about 4.5 million tons, accounting for 16% to 17% of the high-grade powder stock, and the amount available for delivery is much more than that of Jinbuba powder, and other types of high-grade powder ore stocks are also abundant. It is also understood that in the first week of July, the arrival volume of iron ore imported in the first week of July increased to 17.647 million tons, an increase of 1.096 million tons from the previous month, and 1.068 million tons higher than the average weekly degree in June. Of these, the arrival of Brazilian mines to Hong Kong has increased for four consecutive weeks, with a capacity of 3.046 million tons. With the resumption of the supply of imported mines, the current volume available for trading and delivery is more adequate.

Some market participants said that even if the futures convenience delivery products adjusted to 61.5% of the PB powder, its impact on futures prices is also small. It is understood that on July 16, the market price of PB powder in Rizhao Port is 893 yuan / wet ton, after deducting moisture and changing futures standard products, the price is about 986 yuan / dry ton.

On the same day, Rizhao port Jinbuba powder 868 yuan / wet ton, after deducting moisture, the price of futures standard is about 968 yuan / dry ton, the difference between the two is about 18 yuan / dry ton. The settlement price of iron ore futures 1909 contract has risen in the past two days, and the impact of the above information on the market has been fully released on the disk.

In addition, the recent rise in imported iron ore prices has also boosted demand for concentrate. According to relevant sources of Hegang Mining Company, since the listing of iron ore futures in 2013, Hegang Mining has been one of the warehouses designated by the exchange. At present, Hegang concentrate already has a certain amount of warehouse receipts, and various indicators meet the futures delivery standards. Available for delivery. Relevant agencies estimate that as iron ore prices rise, concentrate delivery has been profitable, its delivery volume will increase, which will curb iron ore prices to some extent.

As the star of the domestic commodity market this year, the iron ore market has received a lot of attention. The relevant person in charge of the exchange said that the exchange will continue to strengthen first-line supervision of the market, prevent and control risks, crack down on violations of laws and regulations, and maintain the normal order and smooth operation of the market. At the same time, the exchange is studying the feasibility of a delivery system for iron ore brands, which will still include Jinbuba powder, as well as representative iron ore varieties with less than 60 per cent iron content, and retain domestic iron ore such as fine powder, in order to further expand the availability of delivery. Through the above measures, we can further adapt to the changes of spot trade and meet the risk aversion needs of enterprises.

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