Iron ore futures were softer on Tuesday as data showing higher shipments from Australia and Brazil eased off supply concerns.
According to data by Mysteel, shipments from Australia and Brazil were up by 4.08 million tonnes from a week earlier to 26.03 million tonnes. Furthermore, port overhauls in Australia and Brazil was completed on 25 May and June shipments are expected to recover to normal levels.
Meanwhile, the Mangga Cyclone that hit Western Australia is thought to have very limited impact to iron ore supply. No disruption to port operation in Pilbara was reported according to Pilbara Port Authority. Investors were also left disappointed that no major fiscal stimulus measures were forthcoming in the National People’s Congress. China’s Premier Li Keqiang announced last Friday that the nation had abandoned a numerical GDP target for 2020 in light of uncertainties arising from the coronavirus pandemic.
According to economists at London-based consulting firm TS Lombard, the absence of the GDP target signalled that Beijing will not use stimulus to meet its longstanding goal of doubling 2010 GDP by 2020, with the Government Work Report putting a strong emphasis on job market stabilization and improving people’s livelihoods.
Iron ore futures fell below $93 during the early London morning DCE session. The session began slowly, with Jun and Q3 kept trading at 93 and 88.4 for the first half an hour. A sell-off then followed; aggressive Q3 sellers saw Q3 traded down to as low as 87.75. Jun also traded down to 92.5. Market recovered a touch to close just under $93.0. (FIS)