The iron ore dead cat is still bouncing, with rebar finally joining in:
Dalian futures too:
And coking coal:
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CISA late June steel output was firm, though inventories surged to up a little year on year:
Scuttlebutt is better:
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Average daily out for hot metal among steelmakers surveyed climbed by 1.5% from the previous week to 2.39 million tons as of June 14, the highest since November 2023, data from consultancy Mysteel showed, beating expectations.
Additionally, China’s central bank held a meeting on Wednesday to promote its financial support for affordable housing in a bid to accelerate sales of unsold housing stock, the latest effort to revive the embattled property sector.
…BMI Research said in a note that “a strong build-up of iron ore inventories at Mainland Chinese ports, rising to 147.3 mnt as of June 7, has the potential to place a cap on prices in the coming months.”
At this stage, demand looks OK but supply is booming. However, Westpac sees more weakness in both.
It argues that increased supplies and weakening demand will depress iron ore prices in the second half of 2024.
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Australia and Brazil had record exports in March and April, and China had record iron ore imports in January, February, and April.
Chinese iron ore port inventories are 2 standard deviations above seasonal average levels, 2 standard deviations above seasonal average levels, and at the highest level against imports since February 2023 and compared to steel production since July 2022.
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Westpac sees iron ore below $100 in H2.
This is conservative. With supply booming and the Chinese completions cliff to arrive in H1, 2025, followed by Simandou in H2, 2025 iron ore is almost out of rope.