Iron Ore Enjoys Tailwind From Record Chinese Steel Production

Iron ore continued to enjoy a tailwind from record Chinese steel production, although the weight of ore supply is likely to keep prices in check. Vale produced more than expected last quarter, while BHP’s shipments also rose as demand continues to benefit from China’s rebound.

On the macro front, China kept its Loan Prime Rates unchanged, signaling its satisfaction with the state of the economy. The third-quarter GDP breakdown confirmed the decisive role of manufacturing, and construction in particular, in the recovery so far.

Earnings fallout included a slide in Tianqi Lithium’s stock after losses widened ahead of a key debt repayment. Citigroup thinks a turnaround may require the sale of equity or assets. In contrast, Zijin Mining saw healthy gains after its results, with another strong quarter in prospect due to higher gold prices and copper output, according to Bloomberg Intelligence.

Events Today

(All times Beijing unless shown otherwise)

  • China LNG & Gas International Exhibition & Summit, Shanghai, day 1
  • Citi Global Natural Resources Virtual Conference 2020, day 1

Today’s Chart

Chinese steel and aluminum output hit all-time highs in September, testament to the importance of state-backed investment to the nation’s rebound from the pandemic. But for steel, at least, the surge could be nearing its peak with the approach of winter production curbs to control pollution and as private consumption takes a greater role in the recovery.

Iron Ore Enjoys Tailwind From Record Chinese Steel Production
Markets at Midday
Copper +0.3% in ShanghaiCrude -1.1% in Shanghai
Aluminum -0.2% in ShanghaiThermal coal +0.1% in Zhengzhou
Iron Ore +0.8% in DalianCoking coal +1.2% in Dalian
Rebar +0.3% in ShanghaiSoybeans +2.1% in Dalian
Rubber +0.6% in ShanghaiCorn +0.4% in Dalian

On the Wire

  • China NDRC Approved 17.2B Yuan Fixed-Asset Projects in Sept.
  • Coal Mine Explosion in China’s Shanxi Province Kills 4: Xinhua
  • China Energy Use Per GDP Unit Rises 0.2% in Jan.-Sept.: NBS
  • Linglong Tyre Rebounds After Assuring Thailand Operations Normal
  • Xinyi Solar Jumps; Citi Lifts Views on Solar Glass Price Outlook
  • Muyuan Foodstuff Estimates Raised at CICC After 3Q Profit Surge
  • Lundin to Halt Chile Copper Mine With Second Union to Strike
  • Gazprom’s Gas Flow to China 20% Above Contracted Volumes Oct. 19

The Week-Ahead

Wednesday, Oct. 21

  • China Sept. output data for base metals and oil products. Tentative
  • China LNG & Gas International Exhibition & Summit, Shanghai, day 2
  • Citi Global Natural Resources Virtual Conference 2020, day 2

Thursday, Oct. 22

  • Woodside Petroleum, Santos quarterly production reports
  • China LNG & Gas International Exhibition & Summit, Shanghai, day 3
  • Cnooc briefs on 3Q earnings, 17:35
  • EARNINGS: Cnooc

Friday, Oct. 23

  • China 2nd batch of Sept. trade data, incl. agricultural imports; gas imports breakdown; oil products trade breakdown; alumina and rare-earth product exports; bauxite, steel & aluminum product imports. From ~11:00
  • China weekly iron ore port stockpiles
  • Shanghai exchange weekly commodities inventory, 15:30
  • EARNINGS: Yanzhou Coal, Angang Steel, Chalco

Sunday, Oct. 25

  • China 3rd batch of Sept. trade data, including country breakdowns for energy and commodities. Tentative
  • EARNINGS: China Shenhua Energy

©2020 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.