? Iron ore prices are likely to remain on higher side for a couple of months, said Mr. Keyvan Jafari Tehrani, CEO at Jame Tejarat Co. (JTC) and IROPEX (Iron Ore Producers & Exporters Association of Iran). Following are the excerpts from Steel Mint interview with Mr. Tehrani.
1. How are the sentiments prevailing in Iranian iron ore export market?
? When iron ore market is increasing and price is above USD 65/MT for Fe 62% fines it is break even point for lot of Iranian iron ore miners mainly for private sector. Even now when price touched USD 70 MT this Week the cargo movement for Iranian iron ore private miners is not too much because of competition of Hematite cargo supplied by India and Fortesque getting big discounts. So problem here for mining operations, production and export of Hematite mines and only few miners have kept their mines open.
Around 200 iron ore mines were operating in Iran since 2013-14 including both government and private sector. Now maximum 20 mines are seen to be operational out of which 11 are semi govt.govt and 9 belong to private sector. Only concentrate is moving from government owned mines and high grade magnetite supplied from north of Iran (Sangan). Still the market is not good for small and medium scale mines.
2. Do you expect Chinese spot iron ore prices to remain strong in Aug?
? Yes, it is likely to remain strong mainly for high grade. I believe during August & September market will remain good and prices will be around USD 70/MT and may remain rangebound with minor variations of +/- USD 2. High billet and steel prices have impacted positively iron ore prices as well. But problem is for lower grade, demand for low grade is very poor with limited buyers for grades below Fe 55% and for grade Fe 55-58% buyers expect to receive high discounts.
3. Any major change in vessel freight rates from Iran to China?
? Vessel freight has gone up by USD 0.5/MT. For Supramax 50,000 MT vessels, freight from Bandar Abbas port to China was at USD 11.3-11.5/MT in mid of July which increased to USD 12/MT towards the month end due to much demand & more concentrate movement from Iran. However for smaller vessels like Handymax (37,000 MT) vessel freight rate by the end of July was assessed at USD 13/MT for laycan of 18-23 Aug’17 which was USD 12.5/MT earlier.
4. We have heard that Iran may impose export duty on Iron ore from next year, what is your views on this?
? Since 3 years ago they have been trying to impose this and its happening always that during beginning of Jan’17they announce to impose export duty,
As we know that Government power is transferring from Mr Rouhani to himself because he is still President of Iran for next 4 years but ministry is hopefully to be changed & new people may come in Ministry of Mine and trade. And may be Deputy Ministers may also be changed. This scenario supposed to make decision mainly not by Mar’18 but my Mar’19 announce that 100% they impose high figure for export duty mainly lump and fines cargoes to stop exporting as Iran needst consume these products for local steel mills.
5. How is demand for Iranian medium/low grade Hematite cargoes in China?
? For Iranian iron ore miners and exporters, Hematite below Fe 58% it is hard to sell their cargoes mainly for fines. Due to rally in steel prices and it is estimated that prices will remain high till end of Sept’17. Thus there is demand for buying Hematite fines medium grade & low grade from Iran and most of Iranian exporters face problem and 100000MT cargoes are available on ports with no buyers. Still there are some buyers for lump cargoes (10-30mm). But for fines (0-10mm) below Fe 55%there are no buyers and for Fe 55-58%there are limited buyers. For lump cargoes buyers expect big discounts, much lower than current market price.
6.What are current Iranian iron ore export prices?
? Below are the Iranian iron ore (specifications – S – 0.1% max, P – 0.1% max, SiO2 – 6% max, Al2O3 – below 2%) export prices as on 03 Aug’17
Source: Steelmint
