The ferrous market was mostly weak on July 19, 2022:
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CISA early July steel output numbers were out a few days ago and showed further deterioration:
I expect a repeat of last year’s weak trend in H2 as Chinese property starts keep falling. More evidence can be found in excavators:
Remember that July/August is the second strongest seasonal period for iron ore prices over the year.
There’s no end in sight for bearish iron ore prices and September looms as a wipeout.
Meanwhile from Vale this morning:
• Iron ore production increased 17% q/q to 74.1 Mt, mainly driven by the Southeastern and Southern Systems’ solid performance into the dry season. Northern System production improved 4% q/q, benefiting from favorable weather seasonality with partial offset by one-off stockpiles homogenization activities in Ponta da Madeira to adjust for moisture levels.
As a result of this one-off event, the sale of our Midwestern System (~3.5 Mt) and in order to account for greater flexibility in our production due to current market conditions, Vale is revising its annual production guidance for 2022 to 310-320Mt. The revised guidance is in line with our value over volume philosophy.
Err, selling some production is not cutting it.
In fact, to reach its revised guidance of 315mt it will still need to pump 178mt in H2, up 7mt on H1, 2021 despite the sold output which will keep coming.
This is up 30% from H1, and an annualised rate of 356mt, far above anything it has pumped since its dam disaster.