Market Commentary
second half of the year, SinoSteel Futures wrote in a note. From the 1H iron ore exports to China Platts data showed, Vale and Rio Tinto respectively shipped 128.11Mt and 148.83Mt in the last six months against their annual production guidance of 315-335Mmt and 325-340Mmt. If environmental-related production restrictions are to be implemented strictly, the market might have an oversupply of iron ore, the note added. Meanwhile, iron ore inventories across major ports in China were up 2.23 million tonnes from a week ago to 124.58 million tonnes.
Iron ore futures sank below $203 during morning London time but rebounded above $204 on the back of China’s rate cut. According to a PBOC statement, China’s reserve requirement ration will be cut percentage point, effective from 15 July. The move will release about one trillion yuan of liquidity to the market. Spreads were a touch weaker too, with C22/23 around 40.00. Jul/Aug traded 9.75 in decent chunks while Aug/Sep also traded at 6.80. 65/62 Aug also traded 30.20.
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