Strong demand for steel in China and around the world has driven the price of iron ore, a raw material for steel making, to record highs this month. Japan’s Tokyo Steel announced that from June, the overall increase in steel prices, the rate of increase between 9.5 to 17.6%, for three consecutive months of price increases. The outside world predicts that after Tokyo Steel price increase, is likely to drive a new wave of global steel price increases. As Tokyo Steel’s steel is mainly used in the construction industry, including South Korea POSCO Steel, Hyundai Steel and China Baosteel and other Asian competitors, are closely watching the company’s pricing.
What’s more, in order to calm the rising steel prices, Vietnam recently asked domestic steel makers to increase production and, in a rare move, restrict export sales! Import prices for hot-rolled steel coils, which are important for construction, have risen above $1,000 per ton in Vietnam, the highest in 13 years and a cumulative increase of 50% year-to-date. Vietnam is the largest steel importer in Southeast Asia, buying 13.2 million tons last year, mainly from China.
In response to the oversupply, Australian miner BHP Billiton announced that its iron ore project in Western Australia will be put into production in the coming days, and the Chinese government tightened control over commodity prices, causing Singapore iron ore futures to retreat 5.7% to $201.8 per ton on Wednesday (18); Dalian iron ore futures also fell 4.4%.
Copper]
In addition to steel, another important raw material for construction copper also appeared “export restriction order”! Chilean government in the constitutional amendment election defeat, led by the leftist political parties to amend the constitution after the work of the local copper mining industry is facing the most serious threat of regulations in more than 30 years, adding the risk of copper supply, potential support for copper prices continue to rise. London copper futures on Tuesday had surged 1.2% to $10,496.5 per tonne, Wednesday still hovering at high levels, again approaching the record high of $10,747.5 set last week.
The current membership structure of Chile’s constitutional amendment committee has exposed mining giants such as BHP Billiton (BHP) to stricter regulations and a rather unfavorable operating environment, and may have to bear the heaviest taxes. Although the constitutional amendment process may take a year, but enough to limit the industry’s large-scale investment.
The International Wrought Copper Council (IWCC) said that the copper market supply gap of about 500,000 tons this year, next year is expected to roughly restore the balance of supply and demand.
Gold]
With inflation expectations heating up, coupled with the virtual currency plunge in recent days, gold’s weakness seems to have reversed. swissquote analyst Ipek Ozkardeskaya pointed out that gold rally and bitcoin collapse almost simultaneously, if gold prices can stabilize above $1,850 per ounce, can further challenge the $1,900 level. Spot gold hit a new high of more than 3 months on Tuesday, after rising on Wednesday, then softened, down 0.8% to $1,854.4 per ounce.
Oil prices fell for two days in a row, New York futures oil fell 2.09% to $67.27 per barrel on Wednesday; Brent futures oil fell 2.18% to $64.06, mainly due to the increase in U.S. crude oil inventories last week, as well as Russia revealed significant progress in Iranian nuclear talks.
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