According to Mining News Pro - On weekly reports we are trying to put an scoop on the metal market and find out what is happening in the global market.
Iron ore price up on supply woes, easing China covid curbs
Iron ore price rose on Tuesday supported by supply concerns and shrinking portside inventories, while the easing of some covid-19 curbs in China also lifted trader sentiment.
Benchmark 62% Fe fines imported into Northern China rose 1.24%, to $128.40 per tonne.
“Falling Australian and Brazilian iron ore shipments and arrivals into China week-on-week should provide modest support for fragile sentiment,” said Atilla Widnell, managing director at Navigate Commodities in Singapore.
Iron ore and other steelmaking inputs were also supported following reports that Shanghai will gradually reopen for business following weeks of lockdowns, Widnell said.
Shanghai set out plans on Monday for the return of more normal life from June 1 and the end of a lockdown that has lasted more than six weeks and contributed to a sharp slowdown in China’s economic activity.
In Beijing, authorities have extended guidance to work from home in four districts, but have not enforced a city-wide lockdown.
“Robust blast furnace capacity utilization rates and daily (iron ore) offtakes, and depleting portside inventories should all provide support,” Widnell said.
Iron ore port inventories in China stood at 141.75 million tonnes as of May 13, the lowest since October, according to data from SteelHome consultancy.
Copper price rises on easing covid-19 restrictions in China
Copper prices climbed on Tuesday as easing lockdown restrictions in China stoked hopes of improving demand.
Shanghai set out plans on Monday for ending the covid-19 lockdown that has lasted more than six weeks.
The commercial hub of 25 million on Tuesday achieved the long-awaited milestone of three consecutive days with no new covid cases outside quarantine zones.
“Shanghai is coming out of lockdown gradually and that is giving rise to demand hopes for cyclical commodities in particular,” said Commerzbank analyst Daniel Briesemann.
Copper for delivery in July rose 2.1% from Monday’s settlement price, touching $4.28 per pound ($9,423 per tonne) midday Tuesday on the Comex market in New York.
The metal price fell to an eight-month low last week as aggressive US rate-hike bets and lockdowns in China led to slowdown concerns.
Recent price gains could also be chalked up to short-covering, said Alastair Munro at brokerage Marex, adding that a rally in prices would be limited in a “market whose brittle confidence has been shaken to the core.”
Gold price back above $1,800 as Treasury yield retreats
Gold prices bounced back emphatically on Monday as a retreat in US Treasury yields offset headwinds from a relatively firm dollar, driving more investors towards the safe haven metal.
Spot gold rose 2.0% to $1,813.34 per ounce by 12:20 p.m. ET, after hitting a three-and-a-half-month low previously. US gold futures had a moderate gain of 0.3%, trading at $1,814.00 in New York.
Meanwhile, the US dollar inched lower, but still held near a two-decade peak, making gold expensive for overseas buyers, capping the metal’s gains.
Gold’s rebound was attributable to a dip in Treasury yields and a small pullback in the dollar, RJO Futures senior market strategist Bob Haberkorn told Reuters, adding that the overall trend for the dollar was “still high as the Fed is being aggressive with its rate hikes.”
“All things considered, gold is holding up, it should be significantly lower … it will find support slightly below the $1,800 level. Also, there is enormous demand for physical gold and silver,” he predicted.
“Many still regard gold as being significantly undervalued, and would be even more wiling to buy the metal now that prices have weakened,” said Fawad Razaqzada, market analyst at City Index.