Iron Ore Market Update
Market Commentary
Iron ore futures endured a choppy Monday morning as investors steel supply and demand outlook amid China’s monetary support as well as an uptick in seaborne supply, while concerns of further production restrictions linger on. The Peoples’ Bank of China (PBOC) announced a broad cut in the reserve-requirement ratio to boost the flow of credit amid signs of a slowdown. The move will inject one trillion yuan of liquidity to the market which, according to analysts, will accelerate fiscal spending and the issuance of local government debt to fund infrastructure projects. Investors are also assessing the consumption outlook of China’s steel industry as seaborne flows pick up and inventories continues to pile up. According to Mysteel, iron ore supply should increase in the second half of the year compared to the first half, adding pressure to iron ore prices. Iron ore inventories across major ports in China were up 2.23 million tonnes last week from a week ago to 124.58 million tonnes. Meanwhile, investors remain wary of further production curbs as China look to rein in its steel industry. Some independent rolled steel firms in the steelmaking hub of Tangshan will halt operations for a few days this month, ANZ bank said in a note. Last week China’s National Development and Reform Committee (NDRC) pledged that the world’s second largest economy would aim to increase steel scrap usage by 23% to 320 million metric tonnes by 2025.
Futures in Singapore traded up from 206.15 to 207.9 before edging higher to 208.1 during London morning. It did not last though as August eased off sub-208 once again. Jul/Aug traded down from 8.90 to 8.60 as outrights advanced. Aug/Sep also traded small at 6.75.
Physical Trades
Platform
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 $9.20 per tonne, laycan August 7-18.
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https://fisapp.com/wp-content/uploads/2021/07/Iron-Ore-Report-12072021-Eng-Chn.pdf
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