Market Commentary
Iron ore futures extended the gains on Thursday despite rising steel stockpiles and weaker-than-expected factory activity. China’s factory activity expanded at a slower pace in June, as the resurgence of coronavirus cases in the export province of Guangdong and supply chain woes drove output growth to the lowest in 15 months, the Caixin/Markit manufacturing purchasing managers’ index (PMI) showed. The Caixin/Markit PMI fell by 0.7 basis point from a month ago to 51.3 and fell short of market expectations of 51.8. Meanwhile, rebar inventories continue to pile up due to weak seasonal demand. Total rebar inventories reached 11.44 million tonnes this week, up 280,000 tonnes from a week ago. Despite the rising stockpiles and the softening of China’s expansion, many market participants remain optimistic in prices in the near term, particularly as many expect further production curbs in the second half of the year, which will improve steel prices and margins.
Futures in Singapore were a touch firmer during London morning. Aug was seen trading between 205.1 and 205.3 most of the morning while Jul traded up to 213.3. Sep traded between 198.3 and 198.45. Spreads were a touch firmer at the front but weaker further back as Cal23 was as tight as 106.0/108.0 all morning. Jul/Aug traded up from 8.05 to 8.2 while Jul/Sep traded up from 14.9 to 15.3. Aug/Sep also traded at 7.1 and Sep/Jan traded 23.40. Cal22/23 was marked at 39.85. 65% Aug/Sep traded at 7.0.
Physical Trades
Platform
Vale, Globalore, 170,000 tonnes of 62% Fe Brazilian Blend fines, traded at the August average of Fastmarkets’ index for 62% Fe low-alumina fines, cfr Qingdao plus a premium of $14.70 per tonne, laycan July 24-August 2.
Rio Tinto, Globalore, 170,000 tonnes of 62% Fe Pilbara Blend fines, traded at the August average of a 62% Fe index plus a premium of $11.65 per tonne, laycan August 3-12.
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https://fisapp.com/wp-content/uploads/2021/07/Iron-Ore-Report-01072021-Eng-Chn.pdf
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