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Iron Ore Futures Dip Globally
Team Sea and Coast | 08/07/2020

On Monday Iron ore futures slipped as in China rising port inventories of the steelmaking ingredient aided soothe worries over global supply tightness that have kept spot prices supported at above $100 a tonne for more than a month now.

On the Dalian Commodity Exchange Iron ore fell as much as 0.5% to 740 yuan ($104.90) a tonne, while the Singapore Exchange’s most-active contract dropped 0.9% to $95.64.

In the first half of 2020 the Dalian contract gained 29%. It stayed afloat largely in the second quarter when demand rebounded after China eased its Covid-19 induced restrictions, while concerns emerged over Brazil’s mining operations.

ANZ analysts said in a note, “Vale confirmed it will bring back most of its lost production in the coming months. This gave a signal of easing supply tightness with rising seaborne trades (expected) in the weeks ahead”.

As of July 3 China’s port stockpiles of imported iron ore, which last month dropped to the lowest since October 2016, based on data from SteelHome consultancy, have since steadily climbed, securing 109.75 million tonnes.

A SteelHome data also showed that Benchmark 62% iron ore’s spot price settled at $101.50 a tonne on Friday

According to the Australian government’s latest forecast, Iron ore prices this year are projected to average $79 a tonne which are free on board.