Courtesy of ANZ:
Physical iron ore prices fell another 2.2% to USD114/t, despite mixed performances across the Chinese rebar steel futures and iron ore swaps curve. Moves by the PBoC to ease tight liquidity conditions saw the recent sharp losses in Chinese equities (SHCOMP index) ease back, which supported sentiment for industrial commodities. Iron ore price momentum is still down, but could slow once the market digests China’s central bank press release. On the flipside, coking coal markets firmed to USD135.25/t after reports showed Nippon Steel and BHP Billiton had settled third quarter contracts for the highest grade of premium hard coking coal at USD145/t FOB, in line with ANZ forecasts. We believe the market had already priced in a weaker result from initial offers of USD150/t a few weeks ago, given current bearish market conditions. While the term contract is about 17% below the second quarter contract of USD172/t, it is still USD10/t higher than average spot prices.
ANZ Commodity Daily 850 260613.pdf by Anthony King
