Market Commentary
Iron ore futures failed to rally on Friday as investors assessed the gloomy outlook for the demand in China. Soaring energy costs, power curbs put demand at risk. According to data from the World Steel Association, China’s steel demand is now expected to fall by 1% this year instead of increasing by 3%.
Rio Tinto, released its quarterly report and downgrades its production expectations. the company said that due to the tight labor market in Western Australia, the completion of its new Gudai-Darri mine and the Robe Valley mine replacement project has experienced “modest delays”. It is now estimated that shipments in 2021 will be between 320 and 325 million tons, which is lower than the company’s previous forecast of 325-340 million tons.
Reuters commented that labour shortage and a tight global supply chain has exacerbated its difficulties, and the unfavorable factors of China’s tightening of regulations may trigger further volatility.
The pessimistic outlook of China’s steel demand and the increased decarbonization efforts of the world’s largest steel producer by restricting output have severely affected market sentiment. Market activity is not as active as yesterday.
Physical Trades
Platform
Corex traded 120kt PBF + 50kt PB Lump at Platts Nov 62% Index + $1 and +$1.5, November Arrival.
Corex traded 170kt PBF at $122.8, loading Nov 3-12th.
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