Iron ore markets short-term outlook July 2021 Report

Commodity Market Report 30 July 2021

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Report summary

Another phenomenal month for iron ore with the benchmark 62% Fe index averaging approximately $212/t. But the market took a hit in the final few days of the month with a decisive move below $200/t for the first time in two months. Is this a blip or a sign of things to come? We think the latter. The supply side of the equation remains undeniably tight, but China is getting serious about steel production cuts and as the various COVID related subsidies and fiscal stimulus measures fade so too will iron ore’s phenomenal bull run – it’s just a matter of how much and how soon! Read our monthly update for the latest analysis on short term supply/demand dynamics and price outlook.

Turning point?
Technical indicators – China’s intensified drive to reduce steel output, negatively impacted iron ore price but provided support to steel prices
Global overview: passed the pig iron peak?
China: demand topping out, but supply structurally tight
Production cuts could force shift to lower grades
Where next for Chinese imports?
Chinese ore supply - tight due to Shanxi shutdowns
Indian supply improving, but exports losing ground
Inventories – Chinese p orts’ iron ore inventories increase as steel production growth slows.
Freight – Capesize rates range bound, yet sentiment improving towards month end.

Tables and charts

This report includes 19 images and tables including:

Monthly iron ore price (US$/t CFR)
Key quarterly forecast
62% Fe - Fibonacci Retracement Levels

62% Fe Forward Curves
Chinese pig iron production
Global (ex-China) pig iron production
Portside iron ore trading activity slowing down (kt per day)
National blast furnace capacity utilisation rate stepping down (%)
Chinese imports of iron ore (million tonnes)
Chinese imports of iron ore by country: Jan-Jun, y/y change (million tonnes)
Chinese domestic mine utilisation rate dropped due to restrictions on mining activity.
The timing of restarts remains uncertain for mines in Shanxi Province (North China).
Indian iron ore production
Indian iron ore exports
Chinese iron ore port inventories
Chinese total steel inventories
Capesize freight rates to China
Share of freight rate in 62% Fe iron ore price
Quarterly indicators: iron ore trade, crude steel and hot metal production (Mt)