Forecasts and market analysis based on price assessments from Fastmarkets MB and Fastmarkets AMM

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April 2019 | Steel Raw Materials

Iron ore market sentiment boosted by supply disruptions, but we see the current levels as unsustainable and anticipate a downward correction: Iron Ore Market Analysis

Vale initially indicated some 11 million tonnes per year of pellet production would be affected by the dam decommissioning plan, with market insiders telling Fastmarkets MB this volume is evenly distributed between DR and BF grades.

Due to a tighter supply-demand balance and fewer alternative feedstock options, the direct-reduction (DR) pellet premium has consistently been on the uptrend, but for a decline this January. As the first chart alongside illustrates, unlike the DR pellet premium, the blast furnace (BF) pellet premium, along with premiums for other higher-grade iron ore products such as lump and higher-Fe content fines, exhibits seasonality and is correlated with steel spreads. In fact, the BF pellet premium hit a 20-month low at $34.8 per tonne in the week ended Friday April 5, the lowest level since the first week...


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