The ferrous complex was OK on July 26, 2021 as spot firmed and paper held. Steel has not updated:
In other data, Chinese mills are restocking which is typical for this of year. Port inventories lifted to 129.5mt:
This will aid prices while it lasts.
But the reasons for concern are still there. Steel output is being bullied lower:
These are large production provinces. Other rumoured to have received notices include Fujian, Yunnan and Hebei. It looks like a serious attempt to squash production.
Meanwhile, supply is flowing, as lifting port stocks testify. Clyde Russell:
Australia, the top shipper of the steel-making ingredient, is on track for a modest July export volume, according to Refinitiv, but this follows on June’s exports of 78.04 million tonnes, which was the highest since December.
Many of the June-loading cargoes will have reached their destination ports in Asia in July.
Australia’s iron ore exports are likely to recover in coming weeks with the conclusion of maintenance at a major port in Western Australia state, and fewer weather-related disruptions, although planned maintenance at another port may limit volumes.
However, number two exporter Brazil is slated for a stellar July, with Refinitiv estimating exports of 34.92 million tonnes, the most since August 2020 and up strongly from June’s 30.95 million.
Third-ranked exporter South Africa, which similar to Brazil has been battling ongoing waves of coronavirus outbreaks, is also on track for a strong July with exports around 8.1 million tonnes, which would be the highest since Refinitiv started tracking cargoes in January 2015, and almost double June’s 4.4 million.
Whether the recent price falls continue I have no idea. Restocking may be enough to support prices through July/August.
But beyond that, especially into Sep/Oct, is a price accident waiting to happen.