Commodities forecast for November by KATM

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07 November 2016

Based on the current trades in the beginning of November and closing transactions towards the last month end, KATM has devised the future movement of various commodities for November. Expecting no major shift in the prevailing market conditions, KATM believes that the forecast may differ by a very tiny variance and stay inline with the market expectations.

Recent rally in iron ore prices due to the paper market support is likely to slow down in November thereby keeping the iron ore fines, 62% Fe, in the range of $66 per tonne, CFR China. Similarly, iron ore lumps, 63% Fe, CFR China is expected to prevail around $76 per tonne.

Thermal Coal demand is robust and the oncoming winter season may allow some stockpiling thereby putting a forecasted price of RB1 grade coal at $95 per tonne on FOB basis. Indonesia which is seeking to impose certain duties on the commodity would be able to supply thermal Coal, 5500 NAR, around $86 per tonne, FOB basis.

Coking coal rally will prevail but the swelling in price may not be that intense as seen in last 2-3 months. Premium Hard Coking Coal, FOB Australia is expected to stay inline at $280 per tonne. Low Vol PCI, FOB Australia will be around $150 per tonne in the month.

Scrap prices which are the guiding factor for steel in middle-east, USA and Southern Europe will stay around $260 per tonne for HMS 80:20, on CFR Turkey basis. Black Sea billets will prevail in the range of $314-316 per tonne, FOB basis while HR Coil from China will be at $370 per tonne CFR China basis. US Steel plate indicative level is to stay at $500 per tonne for November on CIF terms.

Overall, KATM expects a positive outlook in November for all major commodities and steel.