Iron ore

The main factors behind the growth are the improvement of the credit policy and the fall in raw material stocks in the ports

September iron ore futures, the most traded on the Dalian Commodity Exchange, rose 3.2% from the previous week – up to 829 yuan/t ($115.68/t) for the July 7-14, 2023, period. This is evidenced by Nasdaq data.

On the Singapore Exchange, quotations of the basic August futures as of July 14, 2023, increased by 1.7% compared to the price a week earlier – up to $109.92/t.

Iron ore prices in China rose last week amid strong June data on raw material imports and credit growth. At the same time, the positive trend is opposed by unfavorable economic prospects and geopolitical tensions.

June imports of iron ore to China increased by 7.4% y/y – up to 95.5 million tons thanks to stable demand from domestic steelmakers, although volumes were 0.7% lower than in May. In general, during the first half of the year, Chinese steel producers increased imports of steel products to a record 576.1 million tons, which is 7.7% more year-on-year.

Aggregate financing of Chinese real estate projects also rose in June, beating market expectations, indicating an improvement in lending. China’s central bank is active in issuing construction loans, and also promotes the completion and delivery of construction works by adjusting loan repayment terms. This is a positive sign for the real estate market, as well as the outlook for steel consumption.

Another factor supporting prices is the reduction of iron ore stocks in Chinese ports. Last week, the indicator fell for the third week in a row, indicating an increase in demand for raw materials.

The slowdown in global economic growth, world trade and investment, as well as geopolitical risks remain negative factors in the market of iron ore. In particular, in June, China’s total exports fell at the fastest pace since the beginning of the coronavirus pandemic against the background of disappointing prospects for the global economy.

As GMK Center reported earlier, imports of iron ore to China in January-May increased by 7.7% y/y – up to 480.75 million tons. In May, China imported 96.17 million tons of iron ore, which is 3.9% more compared to May 2022, and 6.3% more than April 2023.