Market Commentary
Iron ore futures extended its rebound to above $180 after the China Iron & Steel Association (CISA) proposed an industry self-review initiative on Wednesday. A total of seven proposals were outlined in the initiative, urging the iron and steel industry to strengthen market order to further promote high quality development of the industry while vowing steel enterprises will adjust their export strategies to safeguard the domestic supply. In addition, CISA noted that the recent price volatility seen in the iron ore and steel markets were exacerbated by vicious competition among industry players. In order to maintain a stable market, steelmakers are advised not to chase an inflated market but at the same time not to dump when market is on a downtrend.
Meanwhile, China’s peak construction season might have come to an end. According to Mysteel’s rebar inventory data, total rebar inventory was only down by a paltry -0.49% this week to 10.78 million tonnes, the slowest drawdown of stockpiles in over two months. In addition, apparent consumption of the five major steel products (rebar, wire rods, HRC, CRC and Plate) was down for a second week to 11.03 million tonnes this week.
Futures in Singapore found some momentum during early London trading. Jun rallied from 178.60 pre-open to trade 181.0 before creeping up higher to trade as high as 183.5 as the morning progressed. Spreads were wider as well, with Jun/Jul trading from 5.8 to 6.0 while Q4/Q1 and Q4/Q2 were heard trading 12.5 and 23.0. Cal 22/23 was marked at around 26.75.
Physical Trades
Platform
GO traded 170,000 mt BRBF at $190.90/mt for Jun 18-27 loading.
GO traded 170,000 mt PBF at Platts 62% July index +$8.65/mt for Jun 25- Jul 4 loading.
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https://fisapp.com/wp-content/uploads/2021/05/Iron-Ore-Report-27052021-Eng-Chn.pdf
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