Iron ore slumps, China’s PMI rebounds Seaborne iron ore prices extended their losses on

Thursday, as the rebound momentum faltered with gradually retreating import transactions.

The Kallanish KORE 62% Fe index lost $1.07/t to $125.17/dry metric tonne cfr Qingdao. The Kallanish KORE 65% Fe index was down $1.1/t to $142.84/dmt cfr, and the KORE 58% Fe index declined $1.42/t to $116.03/dmt cfr.

On the Dalian Commodity Exchange, September iron ore settled down CNY 6.5/t at CNY 802.5/t ($119.81/t), while on the Singapore Exchange July 62% Fe futures settled down $3.31/t at $119.44/t. The same contract for 65% Fe and 58% Fe futures settled down $2.94/t at $135.0/t, and lost $3.78/t at $109.45/t respectively.

Scrap and billet prices remained stable. 6mm+ heavy scrap delivered to mills in the Yangtze River Delta gained CNY 4/t to CNY 3,291/t. Tangshan billet was unchanged at CNY 4,040/t.

China’s Purchasing Managers’ Index (PMI) recovered in June by 5.7 percentage points to 54.1%, and the PMI for manufacturing returned to expansion after three straight months of decline. China is trying to soften the economic impact of the Covid-19 outbreak, and with the recent relaxation of quarantine policies, logistics have returned to normal.

Steel demand from major projects is expected to improve. The Ministry of Finance and the Ministry of Housing and Urban-Rural Development jointly issued a document requesting to increase the proportion of progress payment for construction projects from 1 August. The progress payment for construction projects by state-owned enterprises should not be less than 80% of the price of completed projects, the document states. This is expected to reduce the burden on construction companies and boost real estate activity.

Kallanish Asia