Metals: Copper +1.5% to $4.34lb, iron ore -5.66% to...

Metals: Copper +1.5% to $4.34lb, iron ore -5.66% to US$201.50/t

Energy: Brent crude +1.9% to US$73.6/bbl, WTI +2.3% to US$71.9/bbl

Key overnight stock moves: BHP LND -0.8%, Rio Tinto LND -2.1%, S32 (LDN) +0.6%, AAL -0.1%, GLEN -0.8%, Vale -0.5%, AA +0.4%, Shell -1.7%, BP -1.9%, XOM -1.1%, Chevron -1.0%, COP -0.6%

Global Indices: S&P 500 +0.20%, DOW +0.07% & FTSE -0.43%

Seaborne iron ore prices fell July 22 as cargo reselling continued unabated with the 62% Fe Iron Ore Index at $201.50/dry mt CFR North China on July 22, down $12.10/dmt from July 21. In line with China’s framework of ensuring lower year-on-year crude steel production in 2021, more mills were heard taking action to comply with the output control goals. “It is unlikely to see a one-size-fits-all control policy being released for the second half of the year, steelmakers should know what to do to limit their full year output,” said a China-based trader source. A southern China-based steelmaker source said, “We have shut down three of our smaller blast furnaces and they should remain shut for a while.” With an influx of supply of Jimblebar fines (JMBF) and MAC fines from BHP following the start of South Flank mining operations, market sources expected blending ratios for these brands to increase and replace the popular Pilbara Blend Fines (PBF).

Iron ore futures in China hit a one-month low as investors assessed the strength of demand in the second half of the year amid the nation’s increasing efforts to cut steel output and rising ore supply. China has repeatedly warned steel firms to cap output below last year’s record. With output jumping 12% from a year ago in the first half, mills are under more pressure to cut production through the rest of the year. Steelmakers in Jiangsu province have received guidance to rein in output from last year’s level, researcher Mysteel reported this week, without citing anyone. Meanwhile, iron ore exports from Australia jumped to 17.5 million tons in the week ended July 16. In Brazil, shipments rose by 15% in tons in the first half. (Bloomberg)