Iron ore prices creeped up slowly in March with The Steel Index (TSI) headline 62% Fe reference price for March ending $4.40 per dry metric ton higher. The March average of US $144.66/dmt CFR Tianjin port was 3% higher than the previous month, according to TSI Iron Ore Monthly Review.
Iron ore imports remained strong in February rising 10% month-on-month, most of the shipments coming from Australia, Brazil and India. The long term outlook of participants at AJM Global Iron Ore Conference in Perth was cautiously optimistic, TSI Review said.
It was another strong month for iron ore derivatives, with over 8m tonnes of swaps and options cleared in total and the volume of options hitting a new monthly record, TSI review said.
Iron ore derivatives enjoyed another strong month in March, though brokers described volumes as “erratic”, with some days seeing nearly 1m tonnes go through and others hardly anything at all. In total over 8m tonnes of swaps and options were cleared basis TSI, representing a 13% increase on February 2012 and a 130% increase on March 2011. Over the first quarter, derivative volumes were three times those cleared in Q1 2011.
Iron ore options continue to show strong growth. Over 2m tonnes were cleared in March, which represented 25% of all derivatives cleared on SGX, CME, LCH.Clearnet and NOS. The majority of these were cleared by CME, which enjoyed a record month, clearing 2.07m tonnes of options and swaps in total - a 78% increase on February 2012 and exceeding its previous record of 2.03m tonnes in August 2011.
Over 100m tonnes of derivatives have now been cleared basis TSI since launch, with a nominal cumulative value of over US$15bn.
The forward curve moved higher through March supported by stronger spot iron ore prices and expectations over a seasonal improvement in Chinese demand in Q2 .
Source: Commodity Online