Market Commentary
Iron ore futures soared to new heights on Friday following robust Chinese demand, while the worsening of bilateral relations between China and Australia continue to spook sentiment. According to a Mysteel survey of 184 Chinese mills, total finished steel products grew by 0.7% to 6.49 million mt during the Labour Day holiday period last week due to low consumption. Despite the rising stockpiles, which was the first weekly gain in ten weeks, domestic rebar prices hit a record 5,489 RMB/mt as of 6 May, signalling that construction steel demand remains robust in China. Furthermore, tensions are escalating between China and Australia, the world’s largest iron ore exporter, after China indefinitely suspended all activity under a China-Australia Strategic Economic Dialogue, leaving investors sweating over possible restrictions on Australian goods including iron ore. It remains to be seen if the fear will be materialized but so far traders are expecting minimal impact on Australian ore imports and have continued to procure medium-grade fines such as the PBF from Australian suppliers due to high steel margins. Some traders are said to be holding onto their stocks in anticipation of further rise in prices.
Futures in Singapore soared to $206 during London morning. Jun was seen trading up from just under 200.0 to as high as 206.0. Meanwhile, Jul traded up from 195.8 to 201.0. Cal 22 was seen trading as high as 159.0, a staggering 13 bucks in a little over 24 hours. Spreads were stretched out wide, with Cal22/23 around 23.4 while Q3/Q4 and Q4/Q1 were around 13.3 and 11.15, respectively. Nov/Dec traded up from 3.75 to 3.85 before widening out even further. May/Jun traded down from 2.35 to 2.05 before leaking further to around 1.25 as market rallied.
Physical Trades
Platform
GO traded 170,000 mt Fe 65% Carajas Fine at $243.60/mt, for bill of lading on May 1.
GO traded 170,000 mt PBF at Platts62% Jun Index + $6.15/mt, for Jun 3-12 loading.
Corex traded 170,000 mt Fe 62% BRBF at $214.20/mt, for Jun 1 – 10 loading.
Click below link to open today’s Singapore Iron Ore Report
Iron Ore Report 07052021 Eng & Chn
For more information please contact
FIS Iron Ore Desk
ferrous@freightinvestor.com
London Number +44 (0) 207 090 1120
Singapore: +65 6535 5189
Shanghai: +86 21 6335 4002