Iron ore markets are quiet ahead of China's latest economic report card

Carl Court/ AFP/ Getty Images
  • Iron ore spot markets were quiet on Friday.
  • Chinese futures were also largely unchanged despite the release of major Chinese economic data during the session.
  • China Q2 GDP will be released today. Monthly readings on industrial output and urban fixed asset investment will also arrive during the session.

Iron ore sport markets remain quiet, recording largely meaningless moves on Friday.

However, with major Chinese economic data released today — including Q2 GDP — that many not remain the case for long.

According to Metal Bulletin, the price for benchmark 62% fines slipped two cents to $64.04 a tonne, holding towards the bottom of the trading band it’s been struck in since the middle of March.

Small moves were also seen across the grades.

The price of 58% fines fell 0.1% to $37.53 a tonne. 65% fines declined by 0.2% to $91.30 a tonne.

The modest moves followed another choppy session for Chinese futures on Friday.

Rebar futures in Shanghai finished trade at 3,959 yuan, having climbed as high as 3,995 yuan earlier in the session, the loftiest level since September 2017. It closed Thursday’s night session at 4,987 yuan.

Hot-rolled coil futures were also supported, finishing the session at 4,025 yuan having traded at the highest level on record earlier in the day.

The gains coincided with news that Chinese steel inventories continued to fall last week.

According to Reuters, citing data from Mysteel consultancy, inventories of steel product fell by 128,200 tonnes to 9.97 million tonnes last week. Stocks of rebar fell 2.1% to 4.57 million tonnes while inventories of hot-rolled coil fell 0.3% to 2.08 million tonnes.

Despite ongoing strength in Chinese steel prices, iron ore futures in Dalian were largely static, finishing trade at 463 yuan a tonne, down marginally from Thursday’s night session close of 466.5 yuan.

Chinese iron ore imports fell 11.6% in June to 83.24 million tonnes, according to data released by China’s National Bureau of Statistics (NBS). That left total iron ore imports over the first half of the year at 530.69 million tonnes, down 1.6% on the same period a year earlier.

Coking coal and a coke futures also slipped during the session.

Despite the release of soft Chinese monetary growth data on Friday evening, there was very little movement upon those levels during Friday’s night session.

SHFE Rebar ¥3,959 , -0.38%
DCE Iron Ore ¥464.00 , -0.11%
DCE Coking Coal ¥1,132.50 , -1.01%
DCE Coke ¥2,017.00 , -1.90%

The lack of movement may reflect that major Chinese economic data will arrive later in today’s session.

While Q2 GDP will grab many of the headlines, steel and bulk commodity markets are likely to pay closer attention to monthly data on industrial output and urban fixed asset investment in June given they will provide an indication on Chinese steel supply and end-demand.

All the Chinese data will be released at midday AEST, an hour after trade in commodity futures will resume.

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