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Early in the year, the first analysts are writing about a seasonal slowdown in commodities. We take a closer look at this using HRC, iron ore and nickel as examples. And Malaysia extends the Corona lockdown.

Stainless Espresso: Iron ore in the seasonal cooling?
Stainless Espresso: Iron ore in the seasonal cooling?

Nickel still positive

Unlike other base metals, nickel continues to hold up and show moderate positive trends. On the LME, it is currently up about 0.8% to 1%. Nickel is also showing positive trends on the SHFE.

Malaysia extends lockdown

In Malaysia, the corona-related lockdown has been extended until the end of June 2021, according to official information. This extension is expected to further influence the availability of stainless steel on the world market.

Iron ore down: Seasonal cooling or market correction?

Iron ore on the Dalian Commodity Exchange (DCE) fell significantly today, Monday, June 21, 2021. Depending on the contract, by more than 9% in isolated cases. But is this already a seasonal cooling or are we just correcting overheated iron ore prices here?

In our analysis, we deliberately refer to the year 2019 and not to the Corona year 2020, as this can only be used as a reference year to a limited extent.

SHFE hot-rolled coils on the rise

There is currently no seasonal cooling to be seen in the hot-rolled coil futures on the SHFE. Compared to April 2021, HRC futures are up almost 10% as of June 21, 2021. And had declined by about 1.6% in June 2019 compared to April 2019.

SHFE nickel futures also up

In June 2019, Ni futures had declined about 2.3% from April 2019 prices. As of June 21, 2021, SHFE Ni futures are up over 4% compared to April 2021.

Volume of LME Ni stocks down significantly in 2021

The volume of Ni stocks on the LME stands at approximately 99,000 MT on June 21, 2021. That’s down nearly 30% from May 2021. And more than 49% since June 2019. And Ni prices on the LME are still nearly 37% higher in June 2021 than in June 2019.

Dalian Iron Ore Futures

Dalian Iron Ore actually averaged about 6.5% down today versus April 2021. But in comparison, they were up 26.6% in June 2019 versus April 2019. In 2019, there was only a significant and possibly seasonal downward correction in August.

Commodities still significantly higher in 2021 than in 2019

If we reference 2021 as a whole to 2019, there are still worlds between commodity prices then and now.

Sources: shfe.com.cn, lme.com, dce.com.cn

Seasonal Cooling?

So far, we have yet to see the seasonal cooling, if it is to come at all.

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