Market Commentary
Iron ore futures steadied ahead of China’s quarterly gross domestic product report and steel output data on due to release this Thursday. Investors are searching for clues on China’s economic outlook as well as demand strength, particularly at a time when authorities are once again sending out mixed messages. Chinese Premier Li Keqiang once again returned to the theme of commodities inflation this week, warning that the nation needs to prepare for cyclical risks and make counter-cyclical adjustments. In comments to state radio, the premier pledged to take comprehensive steps to ease pressure from rising prices, suggesting that Beijing is not yet done with its efforts to rein in raw material costs. Meanwhile, China Iron & Steel Association (CISA) expects a slowdown in China’s steel demand in the second half of the year. Speaking at the opening ceremonies of the Singapore International Ferrous Week, CISA’s chief economist, Wang Yingsheng, said that unfavourable weather in top steel producer China has slowed construction activity, while demand for manufacturing-used steel will also drop as export orders fall. The clampdown on a commodities boom has stoked inflation worries, leading to analysts at Goldman Sachs Group Inc. and Credit Suisse Group AC to upgrade their respective price forecasts in view of a tighter market for the steelmaking ingredient. Authorities in Beijing would hope that the plans to cut steel production and reduce emissions would ultimately curtail the demand for its feedstock iron ore, with investment bank UBS estimating that the curbs would reduce iron ore demand by 75 million tonnes in the second half of the year. Thursday’s output figures should provide an insight into how China’s policy stance is playing out in the ferrous markets.
Futures in Singapore steadied just under $210 in London morning. Aug was seen creeping up from 208.5 to trade as high as 209.9. Cal 22 also traded 158.15. Front-month spreads were crushed in the morning, with Aug/Sep trading down to 5.0. Front-month spreads then mounted a remarkable comeback, with Aug/Sep rebounding to 5.4. Jul/Aug traded down from 7.15 to 7.0. MB65 Aug/Sep also traded at 6.2. Back-end spreads remained compressed with Cal 22/23 around 38.7 and Cal 23/24 under 19.0.
Physical Trades
Platform
Beijing Iron Ore Trading Center (Corex), 170,000 tonnes of 61% Fe Pilbara Blend fines, traded at $214.70 per tonne cfr China, laycan August 8-17.
Corex, 80,000 tonnes of 60.8% Fe Mining Area C fines, traded at $204.70 per tonne cfr China, laycan August 1-10.
Corex, 80,000 tonnes of 60.5% Fe Jimblebar Blend fines, traded at the August average of two 62% Fe indices plus a discount of $11.70 per tonne, laycan August 11-20.
Corex, 110,000 tonnes of 60.5% Fe Jimblebar Blend fines, traded at the August average of two 62% Fe indices plus a discount of $11.80 per tonne, laycan August 6-15.
Corex, another 110,000 tonnes of 60.5% Fe Jimblebar Blend fines, traded at the August average of two 62% Fe indices plus a discount of $12.10 per tonne, laycan August 6-15.
BHP, Globalore, 80,000 tonnes of 62% Fe Newman fines, traded at $215.40 per tonne cfr China, laycan August 1-10.
Vale, Globalore, 170,000 tonnes of 62% Fe Brazilian Blend fines, traded at $220 per tonne cfr China, laycan August 15-24.
BHP, Globalore, 80,000 tonnes of 58% Fe Yandi fines, traded at the August average of two 62% Fe indices plus discount of $18.60 per tonne, laycan August 1-10.
Click below link to open today’s Singapore Iron Ore Report
https://fisapp.com/wp-content/uploads/2021/07/Iron-Ore-Report-14072021-Eng-Chn.pdf
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