Iron ore futures fell below $100 on Monday amid a seasonal slowdown in Chinese activities.
According to latest data from Steelhome, Chinese iron ore port stockpiles gained for the first time since April to 108.4 million tonnes (up +0.56% w/w), as Australia and Brazil ramped up its iron ore production. Cargoes shipped via Australia’s Port Hedland expanded to a record for the month of May.
China’s latest inventory data flags some seasonal weakness for the ferrous trade,” Macquarie Wealth Management said in a report, while adding that mills’ daily output continues to climb, although they are “super-stretched”.
Elsewhere, Japan’s steel production in May fell by 31.8% y/y to 5.92m tonnes, according to Japan’s Iron and Steel Federation. Meanwhile, investors are also assessing risks from pandemic following increased number of cases in China’s capital Beijing.
Local authorities are restricting movement of people in the capital and stepping up other measures to prevent the virus from spreading following a series of local infections. At the same time, there are also signs that outbreaks are worsening in Australia and in the US.
Futures in Singapore slumped below $100 to trade as low as 98.9 in Asia morning. Futures remained on the lower band during London morning, with Jul trading between 98.95 and 99.2. Q4 also traded 88.75 and 88.95. Spreads-wise, Q1/Q2 traded 3.85 when Q3/Q4 was 7.45 during the DCE session.