in Commodity News,Dry Bulk Market 23/07/2022
Iron ore futures rose on Friday, with the Dalian benchmark contract rebounding from a seven-month low, as falling steel inventories in China spurred hopes for some replenishment-driven demand.
In Singapore, the steelmaking ingredient climbed back above the $100 mark and was on track for a weekly gain, as Brazilian miner Vale SA’s VALE3.SA move to cut its 2022 iron ore production forecast provided additional boost.
The most-traded iron ore, for September delivery, on China’s Dalian Commodity Exchange DCIOcv1 ended daytime trade 3.6% up at 681 yuan ($100.68) a tonne. Thursday’s close at 657.50 yuan was its weakest since Dec. 29.
Iron ore’s front-month August contract on the Singapore Exchange SZZFQ2 rose 3.5% to $101.35 a tonne, as of 0704 GMT.
Inventories of rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate held by the 184 Chinese steel mills regularly surveyed by Mysteel consultancy declined at the faster pace of 6.8% on week to a near six-month low of 5.7 million tonnes over July 14-20.
Steel products held by traders decreased for a fifth consecutive week to reach a 5-1/2-month low of 21.7 million tonnes as of July 21, lower by 818,600 tonnes or 3.6% on week, Mysteel reported.
“Iron ore demand is expected to improve to some extent,” analysts at Sinosteel Futures said in a note, citing Mysteel’s inventory report and Vale’s latest output guidance.
Other steelmaking ingredients also rebounded, after a two-day selloff. Dalian coking coal DJMcv1 rose 2.1% and coke DCJcv1 gained 2.7%.
Construction steel rebar on the Shanghai Futures Exchange SRBcv1 rose 1.4%, while hot-rolled coil SHHCcv1 edged up 0.7%. Stainless steel SHSScv1 slumped 1.6%.
But with the overall steel demand outlook in China, the world’s biggest steel producer, still clouded by COVID-19 lockdowns and troubles in the property sector, iron ore could remain under pressure in the medium term, analysts said. Source: Reuters (Reporting by Enrico Dela Cruz in Manila; Editing by Uttaresh.V and Christopher Cushing)