Market Commentary
Iron ore futures retreated on Thursday after a robust rally on Wednesday as traders are optimistic of a pickup in autumn demand in China. Rebar inventories fell for a seventh week. According to the latest data by Mysteel, total rebar inventories currently stood at 9.83 million tonnes, down 5.2% from a week ago. Production also fell sharply this week by 11.78% due to ongoing curbs on steel output.
MySteel Rebar Inventory:
Rebar production 2.71 million tonnes, down 11.78% w-o-w.
Mills inventory 2.79 million tonnes, down 8.82% w-o-w.
Circulation inventory 7.04 million tonnes, down 3.68% w-o-w.
China’s seasonal demand will boost steel margins, supporting iron ore prices in the short term and prices may continue to rebound given the current slump is excessive, Wei Ying, analyst at China Industrial Futures Co., wrote in a note on Thursday. Demand for iron ore usually peaks when manufacturer ratch up activities post summer. Mills also tend to build up inventories of the raw material ahead of the National Day holiday week starting from 1 October. More broadly, market sentiment has improved greatly after China’s largest property developer, China Evergrande Group, reached an agreement with yuan bondholders on an interest payment following mounting concerns that the property giant was set to default. Meanwhile, China’s central bank also moved to inject liquidity into the market which aided demand outlook for commodities.
Futures in Singapore slipped below $110 on Thursday. Oct was seen trading down to 106.35 during London morning before recovering to just under £110. Spreads were once again wider, with 22/23 around 8.75. Q4/Q1 traded at 2.5 early in the morning but since widened out to 2.75. Q2/Q4 also traded at 4.9.
Physical Trades
Platform
Vale, Globalore, 170,000 tonnes of 65% Fe Iron Ore Carajas fines, traded at the November average of Fastmarkets’ index for iron ore 65% Fe Brazil-origin fines, cfr Qingdao plus a premium of $3.90 per tonne, bill of lading dated September 16.
BHP, Beijing Iron Ore Trading Center (Corex), 100,000 tonnes of 60.5% Fe Jimblebar fines, traded at the November average of two 62% Fe indices, plus a discount of $18.10 per tonne, November arrival.
Corex, 110,000 tonnes of 60.8% Fe Mining Area C fines, traded at the October average of two 62% Fe indices, plus a discount of $1 per tonne, laycan October 28-November 4.
Click below link to open today’s Singapore Iron Ore Report
https://fisapp.com/wp-content/uploads/2021/09/Iron-Ore-Report-23092021-Eng-Chn.pdf
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