The benchmark Iron Ore Futures 62% Fe (CME) dropped to US$93.94 (as on 8th May 2019, GMT-4, 5:01 AM New York Time). The prices previously rose amid a ban on Vale’s Brucutu Mine , and fell prior to that over shipment arrival across Chinese ports from Brazil and production halt in Tangshan.
However, the commodity prices settled at RMB 652 (as on 7th May) at Dalian Commodity Exchange (DCE), up 2.19% as compared to its previous close.
The imports of Iron ore declined in April across Chinese ports, and as per the data, the iron ore and concentrate imports in April stood at 80.77 million metric tonnes, which marked a decline of 6.54% as compared to the imports in March 2019. As per the market estimation, the fall marked 2.59% lower imports in April 2019, as compared to the imports in April 2018.
As per the data, the year-to-date (as on 8th May) import marked a decline of 11.78 million metric tonnes to stand at 341 million metric tonnes, down by 3.33% as compared to the previous corresponding period.
Despite the lesser imports, inventory across Caofeidian rose significantly, marking an increased supply. As stated earlier, the freight rate also plunged, which in turn, signified less imports and high exports (high supply) scenario.
As mentioned previously the steel inventory is expected to decline; the long-steel social inventories in Guangzhou declined and shrank by 8.07% as compared to the inventory on 25th April 2019. The total long-inventory in Guangzhou stood at 1.49 million metric tonnes (as on 8th May 2019).
In the current scenario, the production loss from the ban of Brucutu Mine is indemnified by less demand amid production halt in Tangshan, which is a substantial steel making producing province in China. However, the steel prices in China are still moving up, which in turn, could prompt the mills to engage in procuring activities if the demand of steel emerges in the global market.
The steel Rebar prices rose over the decline in long-steel inventory and production loss from the vale. The prices of the October contract of SHFE Rebar climbed by RMB 11.00 to close at RMB 3767 (as on 7th May).
As per the data from China Customs, China exported 6.88 million metric tonnes of steel in April, up by 0.55 million metric tonnes, as compared to the export of steel in March 2019. However, the recent event of trade-war is expected by the market participants to hamper the global steel demand, as it is estimated to exert pressure on global economic conditions.
In a nutshell, the steel inventory in China is again expected to decline over the production halt in Tangshan provinces in China, and the steel prices are estimated to continue their upside journey. However, the global cues can exert pressure on the prices and demand, and the market participants should keep a close watch over the development.
Iron ore supply is estimated to be more as compared to the demand; however, market believes that if the global demand picks up a pace, the supply loss from vale could support the prices.
This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice.
There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.
Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.
As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.