Market Commentary
Iron ore futures were subdued on Tuesday despite mounting supply concerns as investors remain concerned over steel demand outlook. The BHP Group has indicated that Port Hedland, its main export gateway, will undergo a massive maintenance. Meanwhile, its Brazilian counterpart, Vale, said that its new mining projects are like to be delayed while Anglo American has slashed its iron ore sales target due to railroad restrictions. Meanwhile, the heavy rainfall that swept across Chinese provinces of Henan and Hebei last week has severely damaged the transportation network and logistics of the region. The aftermath of the torrential rainfall will continue to be felt in the coming week but most of the port operations are thought to have resumed. Despite the supply concerns, iron ore prices remain subdued as investors are wary of further output restrictions after steel mills in the provinces of Jiangsu, Anhui, Fujian and Yunnan have been told to slash their production for the second half of the year. Meanwhile, rebar output for the week 15-21 July stood at 3.35 million tonnes, down 5.5% from a week prior as a result of the power supply cut measures that were put in place in Henan, Guangxi and Yunnan. Capacity utilization rate of 71 independent electric-arc-furnace (EAF) steelmakers were down by 2.83% on-week to a three-month low of 64.55%, data from Mysteel showed.
Futures in Singapore eased off to $197 during morning London. Sep traded down from 194.25 to 193 before easing off a touch to sub-93. Aug also traded down from 198.0 to 196.9. Spreads were wider in Asian but had since narrowed a touch in London, with Cal22/23 once again below 36.0 to around 35.8. Aug/Sep traded down from 4.30 to 4.15 while Aug/Q4 also traded down from 12.95 to 12.7.
Physical Trades
Platform
Rio Tinto, Globalore, 170,000 tonnes of 62% Fe Pilbara Blend fines, traded at the September average of a 62% Fe index plus a premium of $5.20 per tonne, laycan August 26-September 4.
Rio Tinto, Globalore, 170,000 tonnes of 62% Fe Pilbara Blend fines, traded at the September average of a 62% Fe index plus a premium of $5.25 per tonne, laycan August 27-September 5.
Click below link to open today’s Singapore Iron Ore Report
https://fisapp.com/wp-content/uploads/2021/07/Iron-Ore-Report-27072021-Eng-Chn.pdf
For more information please contact
FIS Iron Ore Desk
ferrous@freightinvestor.com
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