Market Commentary
Iron ore plunged to the lowest in seven months on rising supplies while the new round of production curbs have also dampened the outlook for the steelmaking ingredient. Exports from Brazil were at a record for the month of August while shipments from Australia have also increased. Meanwhile, iron ore inventories at ports in China climbed to 131.4 million tonnes last week, the highest since end of April, data from SteelHome consultancy showed. Adding on to the woes, Luo Tiejun, vice president of the China Iron and Steel Association (CISA) said that the association is working on improving domestic supply capacity, according to a statement on its website. CISA also said that it will work toward increasing domestic iron ore volumes by at least 100 million tonnes by 2025. Meanwhile, authorities in the city of Handan issued fresh curbs that will last to the end of the October, according to its website. According to Mysteel, the fresh curbs, which include the closure of some furnaces, may lower the city’s steelmaking capacity by 8.6%.
Futures in Singapore took a nosedive during London morning. Oct rebounded early in London, trading up from 136.45 to as high as 137.75. Iron ore then collapsed, with Oct trading down to as low as 130.5. Jan also traded down from 128.75 to 123.25 while Nov also traded from 133.5 to 133.0. Spreads were also battered, with Cal22/23 at lowly 20.70. Sep/Nov traded between 5.50 and 5.65.
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