Seaborne iron ore concentrate discounts narrowed this week as the gap between the 65pc and 62pc indices tapered, though demand for concentrates did not pick up.

Australian concentrate was assessed at a discount of 50¢/dry metric tonne (dmt) to the September 65pc fines index, up by 30¢/dmt from a week earlier. Ukrainian concentrate was assessed at a discount of $3.20/dmt below the October 65pc fines index on the same day, up by 30¢/dmt from a week earlier.

The gap between Argus 65pc and 62pc fines indices fell to $7.90/dmt on 5 August, the lowest level since November last year.

A half vessel of August-laycan Ukrainian concentrate, typically sold on Capesize vessels, was traded at a discount of $3/dmt to an October 65pc index on 4 August, down from a discount of $3.50/dmt last week. An August laycan Chilean concentrate was heard traded at a discount of around $1.50/dmt to an August 65pc index on the same day.

“I don’t see any uptick in demand for imported concentrates right now, as mills are keen to use domestic concentrates to pelletise due to the cheaper costs. The narrowing of 65pc and 62pc indices has reduced the discount for concentrates though,” a Beijing-based trader said.

Offers were largely unchanged from last week. Low-sulphur Ukrainian concentrate with August laycan was offered at a discount of $2.50/dmt below an October 65pc index, while another cargo with July laycan was also offered at the same discount, below a September 65pc index. A cargo of Minas Rio concentrate with late July laycan was offered at a premium of $1.20/dmt to a September 65pc index. A cargo of low-sulphur concentrate with late July laycan was offered much higher, at a premium of $1.50/dmt to a September 65pc index.

“The current high domestic concentrate output has been dampening the demand for imported grades,” a Shanghai-based trader said.

“South African-origin 60pc Fe PMC concentrate was tradable at around a discount of $10/dmt to 62pc index now,” he added. The brand, produced by Palbora Mining Company, is not commonly seen in the spot market.