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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
METALS
Iron ore is holding close to this week's lows. The active SGX contract last near $93.00/ton. Yesterday's lows at $92.65/ton mark recent lows, while an earlier spike above $95.00/ton wasn't sustainable.
- Broader risk appetite has stabilized as this week has progressed, with global equity sentiment continuing to improve as US recession fears have faded based off recent data outcomes (retail sales and initial jobless claims from Thursday).
- Iron ore hasn't benefited from such trends though, particularly compared to other commodities. The chart below overlays spot iron ore versus copper prices, which highlights this divergence in the metals space.
- Likely concerns around China's local steel industry outlook are keeping iron ore under pressure. Post yesterday's July activity update, sell-side economists are mostly talking about downside risks to growth in the near term. Onshore steel pressures have stabilized somewhat but still hold close to recent lows.
- Data on China iron ore inventories, which should print later for this week, will also be in focus.
Fig 1: Iron Ore Not Bouncing With Other Metals
Source: MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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