The ferrous complex was firm on June 30, 2021 as spot lifted and paper followed. Steel has not updated:
There are a number of marginal signals suggesting weakness creeping in. The China steel PMI is steadily softening, especially new orders at 34.8:
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Grade spreads are widening as well:
Prices of lower Fe grade iron ore fines, especially those of Super Special Fines and Jimblebar Fines, are weakening in China’s iron ore market, with their price spread against medium to high Fe grade fines such as PB Fines reaching multi-year highs, market sources said on Wednesday.
The price spread between 61.5% Fe PB Fines and 56.5% Fe Super Special Fines at Qingdao port in East China’s Shandong province as assessed by Mysteel had surged to a record high in the mid-April, and then continued to spread wider to reach a new record of Yuan 445/wmt ($67.6/wmt) on June 24.
Some of this is the green push but perhaps not all.
China’s construction PMI is still strong:
But new orders have fallen to 51.2.
For the time being this creeping weakness has killed the rally and delivered price range-trading. That’s the base case for a few more months before more obvious weakness arrives.