Iron Ore Futs Surge To $70/Ton

Ok, so iron ore is off and fucking runnin’ for anyone interested in that (not sure how many readers this applies to, but it’s notable).

Futs just jumped more than 6% on the SGX AsiaClear:

IronOre

That’s the highest since April.

“The key driver of iron ore at the moment is resilience in Chinese steel prices, which continue to climb, aiding mills’ profit margins,” Tan Hui Heng, a Singapore-based analyst at Marex Spectron, told Bloomberg by e-mail on Tuesday.

“With such prices, mills are enjoying strong margins, which would continue to incentivize them to maintain high steel rates and as such renewed consumption, and therefore demand, for iron ore,” Tan adds.

This comes a day after prices rose +2.2% to $65.60 after upbeat econ data out of China and moments after Rio Tinto said it expects iron ore shipments to come in at the lower end of its target for 2017 at 330m tonnes.

As FT notes, the “previous guidance for 2017 was between 330 to 340m tonnes, but Rio said the lower target takes into account production in the first half of the year and continued rail maintenance in the latter half of the year.”

Here are the rest of the numbers:

  • Rio Tinto Lowers Iron Shipment Forecast on Rail Maintenance
  • Rio sees 2017 Pilbara iron ore shipments ~330m tons, saw 330mt-340mt.
    Production forecasts:
  • Unchanged for mined copper, refined copper, diamonds, semi-soft coking coal, thermal coal, bauxite, alumina, aluminum
  • Hard coking coal cut to 7.2mt-7.8mt, saw 7.8mt-8.4mt; cites Cyclone Debbie
    2Q Pilbara shipments 77.7mt vs median est. 81.8m tons (4 analysts, range 78.1m to 87.7m tons)
  • 2Q hurt by “accelerated” rail track maintenance
  • 2Q mined copper 124.7kt vs est. 126k tons (5 analysts)
  • 2Q hard coking coal 1.56mt tons vs est. 2.1mt (4 analysts
  • 2Q aluminum 888kt vs est. 900kt (4 analysts)
  • 2Q bauxite 12.9mt vs est. 12.2mt (4 analysts)

And then there was this:

  • Fortescue Metals Responds to Media Speculation on Production
  • Co. clarifies a report in the Australian paper on Tuesday which said it planned to add capacity for another 20m tons a year of iron ore.
    • Co. says report referred to “the terms of the environmental approval being sought for the future Eliwana mine development”
    • Approvals based on estimated annual production of 30m tons per annum w/ infrastructure to be constructed to accommodate annual production rates up to 50 mtpa
    • “This is consistent with normal approval processes and allows future flexibility. It does not reflect Fortescue’s production guidance,” co. says
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