Iron Ore Market Update
Market Commentary
Iron ore futures sank below $200 on Monday after regulators in China vowed to take actions to stabilize the prices of iron ore and other commodities. During a visit at an iron ore trading centre on Monday, officials from the National Development and Reform Commission and the State Administration for Market Regulation said that China will firmly crack down on iron ore monopoly, price speculation and hoarding. This came as China is tightening its grip on the supply of steel and coal in an effort to tame commodities inflation. Chinese officials will spend the next month or so across the country to check on capacity curbs in the steel industry. Meanwhile, mills in the steel hub of Hebei have already expanded production controls, according to Mysteel. Analysts at UBS believe that iron ore is approaching “an inflection point” and expect prices to more than halve to about $90 a tonne in 12-18 months. Meanwhile, steel scrap imports into China jumped 50% in May from a month earlier to the highest in more than two years, while the country’s purchases of iron ore were the lowest in a year. China has been seeking to reduce its reliance on iron ore imports and boost consumption of greener alternative such as scrap.
Futures in Singapore tumbled as much as $10 on Monday as iron ore slumped below $197. Jul failed to hold on above $200 after the open as it slumped to trade 198.35. It did bounce back to trade 198.75 before leaking once again to sub-197. Aug also traded down from 191.35 to 189.0, then recovering to trade 190.25 before drifting down to mid-189. Spreads were, however, very resilient despite the $10 drop in futures prices. Aggressive onshore Sep/Jan buyers saw it traded at 24.0. Jun/Jul traded up from 13.5 to 13.85 as iron ore slid below $197.
Physical Trades
Platform
BHP, Globalore, 100,000 tonnes of 62% Fe Mining Area C fines, traded at $201.10 per tonne, laycan July 6-15.
Click below link to open today’s Singapore Iron Ore Report
https://fisapp.com/wp-content/uploads/2021/06/Iron-Ore-Report-21062021-Eng-Chn.pdf
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FIS Iron Ore Desk
ferrous@freightinvestor.com
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