Market Commentary
Iron ore futures fell sharply on Monday over as output restrictions have been extended outside Tangshan while seasonal factors have also dampened the mood for the steelmaking ingredient. Steel rolling mills in Tangshan’s Fengrun District will have their output slashed for the week between 5th and 13th June. The fresh restrictions will affect an extra 33,500 tonnes of daily output. The operating rate among 35 billet processing mills will be reduced from 59.57% to around 22%. Meanwhile, in the city of Xuzhou, a major city in the Jiangsu province, steel mills must comply with the new directive which states that annual crude steel output cannot exceed last year’s level. About 8 million tonnes of crude steel output in the Jiangsu province will need to be slashed in the second half of the year, according to Mysteel. Furthermore, sentiment around the raw material has turned cautious as China’s rainy season is fast-approaching, which has traditionally been a lull period for the steel sector. According to official custom data, iron ore imports have slowed to 89.79 million tonnes in May, a monthly drop of 8.69%. While the week-long Labour Day holiday at the start of the month could be partly blamed for the sharp monthly decline, the trade data added to signs that the demand for the raw material may be faltering. In addition, due to the seasonal weather, Mysteel expects steel price to decline further for the 7-11 Jun period.
Futures in Singapore fell by over $7 to $193 in Asia. In London, Jul was seen hovering between 191.0 and 193.0 most of the morning before a tick up saw it edged to 194.0. Spreads were also a touch narrower, with Q3/Q4 at around 16.7. Jun/Jul traded at 7.7 and then at 7.5 as Jul edged to 194.0.
Physical Trades
Platform
Rio Tinto, Globalore, 170,000 tonnes of 62% Fe Pilbara Blend fines, traded at the July average of a 62% Fe index plus a premium of $8.70 per tonne, laycan June 30-July 9.
Rio Tinto, Globalore, 170,000 tonnes of 62% Fe Pilbara Blend fines, traded at the July average of a 62% Fe index plus a premium of $8.80 per tonne, laycan July 1-10.
Click below link to open today’s Singapore Iron Ore Report
https://fisapp.com/wp-content/uploads/2021/06/Iron-Ore-Report-07062021-Eng-Chn.pdf
For more information please contact
FIS Iron Ore Desk
ferrous@freightinvestor.com
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