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Daily Iron Ore Price, Commodities and Precious Metals Update - October 2014
Topic Started: 3 Oct 2014, 10:08 AM (14,645 Views)
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China steel drops near record low as rout extends on weak demand

Thu Oct 9, 2014 9:38am IST
By Manolo Serapio Jr

SINGAPORE, Oct 9 (Reuters) - Shanghai rebar futures slipped
on Thursday to trade near record lows reached the session
before, as weak demand in top consumer China kept pressure on
steel prices that have fallen by nearly a third this year.
Steel mills in China with long-term iron ore contracts with
miners have continued to unload excess cargoes into the spot
market, adding to plentiful supply that has overwhelmed the
market and has trapped prices for the raw material near
five-year lows.
"Chinese steel mills are selling their long-term contract
cargoes to us aggressively," said an iron ore trader at a global
trading firm in Singapore, adding he had received offers for
nine iron ore cargoes from six mills today.
"Mills are starting to idle their blast furnaces as steel
prices keep dropping due to lack of demand."
The most-active rebar contract for January delivery on the
Shanghai Futures Exchange was down 0.3 percent at 2,525
yuan ($412) a tonne by midday. It fell to 2,510 yuan earlier,
just off a record low of 2,507 yuan touched on Wednesday.
The price of construction-used rebar has dropped nearly 32
percent this year.
Chinese steel mills have been unloading their excess iron
ore cargoes "to free up cashflow" amid tighter credit
conditions, the trader said.
Sinosteel Corp, China's biggest state-owned steel
trader, last month said it was facing financial problems as a
result of unpaid bills from customers, but denied rumours that
it is struggling under the weight of overdue loans amounting to
10 billion yuan ($1.63 billion).
Iron ore for immediate delivery to China .IO62-CNI=SI
slipped 0.3 percent to $79.80 a tonne on Wednesday, according to
data compiled by The Steel Index. The price fell to $77.50 at
the end of September, its weakest since 2009.
Iron ore has fallen more than 40 percent this year, hit hard
by a glut in supply at a time of slower demand growth in China
which buys around two-thirds of the world's iron ore.
Rio Tinto , the world's No. 2 iron ore
miner, reiterated on Thursday that lower iron ore prices will
remove 125 million tonnes of high-cost supply this year.

Citing the relentless decline in iron ore to below $70 a
tonne at the end of the third quarter, Morgan Stanley said it
has slashed its price forecast for the fourth quarter by 12
percent to $85. It also cut its 2015 estimate by 3 percent to
$87.

"New, low cost iron ore supply is flooding the market at a
rate well above demand growth. A supply-driven rebalance is
needed to save prices," Morgan Stanley analysts said in a
report.

Read more: http://in.reuters.com/article/2014/10/09/markets-ironore-idINL3N0S41PK20141009
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Dr Watson
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Edited by Dr Watson, 10 Oct 2014, 10:13 AM.
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CBA Commodities Daily Alert 09-Oct-14

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China implements import coal tariffs

China’s government will add an import tariff of 3% to coking coal and
6% to thermal coal from 15 October in an attempt to save the
domestic Chinese coal industry. China National Coal Association
estimates ~70% of China’s coal miners were making losses as
domestic coal prices fell to six-year lows. With ~25% of Australia’s
coal exports going to China, the move will likely add more margin
pressure on Australian coal producers. We expect the tariff will add
downward pressure to Australian coal volumes and prices. China’s
coking coal imports account for 11-12% of its coking coal
consumption, while China’s thermal coal imports comprise ~9% of
its thermal coal demand.

Base metals and gold futures rose in response to the minutes from
the Federal Open Market Committee (FOMC) September meeting,
which eased concerns the Fed will increase rates soon and
highlighted risks to the US economy from a slowing global economy
and a high USD. Crude oil benchmarks fell as the IMF downgraded
its global growth forecasts for 2014 and 2015 on exacerbated
surplus concerns already triggered by rising crude oil supply in the
US and record crude oil output in post-Soviet Russia. Iron ore fell by
1.6% to USD78.88/t (CFR China).

Aurubis, Europe’s largest refined copper producer, plans to lift
copper premiums from USD105/t in 2014 to USD110/t in 2015.
Copper premiums are paid on top of LME copper prices for prompt
delivery of the metal.
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Dr Watson
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Edited by Dr Watson, 13 Oct 2014, 09:21 AM.
The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt — Bertrand Russell
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CBA Commodities Daily Alert 10-Oct-14

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US oil rigs at record high

Base metals finished mostly lower on demand concerns after the
ECB said there are signs the European economic recovery may be
slowing. Demand sentiment also fell after the Chinese Academy of
Social Sciences, a Chinese government-backed research
organisation, downgraded China’s economic growth forecast from
7.3% to 7.0% in 2015. Gold futures fell as the US dollar
strengthened. Crude oil benchmarks rebounded after falling to multiyear
lows. Over the week, alumina fell marginally to USD355/t. Iron
ore rose by 1.7% to USD80.24 (CFR China).

Norilsk Nickel, the world’s largest nickel producer, believes nickel
markets are balanced and the record-high LME nickel stockpiles
reflect a movement of up to ~100kt of nickel previously used in
inventory financing in China.

Wait times for the delivery of aluminium at the LME warehouses
owned by Metro in Detroit rose from 620 days in August to 702 in
September. Aluminium waiting times at Pacorini Metals-owned LME
warehouses in Vlissingen rose from 599 days in August to 625 days
in September. The increase in waiting times at these warehouses
likely reflects a lift in trade financing demand for aluminium. This
trade involves using an upward sloping aluminium forward curve to
lock in a fixed return, by purchasing the metal in the near term and
selling at a known higher price at a future date.
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Dr Watson
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Edited by Dr Watson, 14 Oct 2014, 09:23 AM.
The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt — Bertrand Russell
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CBA Commodities Daily Alert 13-Oct-14

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Iron ore lifts on China trade data

Base metals and iron ore finished mostly higher on demand hopes
after China’s exports and imports grew more than expected in
September. Demand sentiment also improved after China’s Premier,
Li Keqiang, said that he expects China’s economy to grow 7.5% this
year. Iron ore rose 4.9% to USD84.17/t (CFR China), the largest
increase since October 2012. Crude oil benchmarks fell on concerns
OPEC will compete for market share in crude oil markets instead of
price, after Iraq followed Saudi Arabia and Iran in cutting prices for
their crude oil products. Gold futures rose as the USD fell on views
the Federal Reserve will keep interest rates low due to a faltering
global economy.

China’s copper ore and concentrate imports rose 26% y/y to 1.29Mt
in September, reflecting increased demand for ores as China boosts
its copper smelting capacity. China’s refined copper output has lifted
this year, with August production showing a 21% y/y lift to 681kt.

China’s preliminary trade data was out yesterday for September. Iron
ore imports rose 13% m/m and 14% y/y to 84.7Mt. China’s imports
of copper unwrought metal rose by 16% m/m but remained 15%
lower y/y at 390kt. Net crude oil imports rose 7% y/y to 27.5Mt. Net
exports of crude steel rose 9% m/m and 95% y/y to a record
monthly high of 7.35Mt in September. Aluminium exports (unwrought
and alloys) rose 3% m/m and 25% y/y to 400kt.
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Blondie girl
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So, can the fe prices stabilize hopefully for a while Im wondering?
Newjerk? can you try harder than dig up another person's blog. My first promo was with Billabong and my name in English is modified with a T, am Perth born but also lived in Sydney to make my $$
It's Absolutely Fabulous if it includes brilliant locations, & high calibre tenants..what more does one want? Understand the power of the two "P"" or be financially challenged
Even better when there is family who are property mad and one is born in some entitlements.....Understand that beautiful women are the exhibitionists we crave attention, whilst hot blooded men are the voyeurs ... A stunning woman can command and takes pleasure in being noticed. Seems not too many understand what it means to hold and own props and get threatened by those who do.
Banks are considered to be law abiding and & rather boring places yeah not true . A bank balance sheet will show capital is dwarfed by their liabilities this means when a portions of loans is falling its problems for the bank.
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China iron ore, steel prices jump 4 pct on hopes market has hit bottom

Mon Oct 13, 2014 9:33am IST
By Manolo Serapio Jr

SINGAPORE, Oct 13 (Reuters) - Chinese steel and iron ore
futures surged 4 percent to reach their upside limits on Monday
as investors covered short positions on expectations prices may
have hit bottom after sliding to record lows over the past two
weeks.
Steel and iron ore easily outperformed other commodities
traded in China, sparking a flurry of physical deals on iron ore
platform globalORE.
Helping brighten investor sentiment was data showing China's
overall exports rose more than forecast and imports unexpectedly
gained in September.
The most-traded rebar for January delivery on the Shanghai
Futures Exchange rose as much as 4 percent to hit its
exchange-set ceiling of 2,664 yuan ($435) a tonne, before paring
gains to stand at 2,641 yuan by midday, up 3.1 percent.
On the Dalian Commodity Exchange, the January iron ore
contract rose as much as 3.9 percent to touch its
upside limit of 584 yuan a tonne. It was last up 3.4 percent a
581 yuan.
"It's short covering. I think generally the market is coming
round to the idea that maybe we hit a short-term bottom and
there are massive speculative short positions in both markets,"
said Graeme Train, analyst at Macquarie in Shanghai.
"I don't think the fundamentals would really justify a 4
percent leap in the day, so it's just a reflection of how short
the market was."
Iron ore futures in Singapore also climbed. The November
contract on the Singapore Exchange rose 3.1 percent to
$82.87 a tonne.
The Chinese economy is also likely to reaccelerate in terms
of activity after weakness in recent months, analyst Train said.
China's exports rose 15.3 percent in September from a year
earlier, beating forecasts in a Reuters poll for a rise of 11.8
percent. Imports rose 7 percent, defying expectations for a 2.7
percent fall and calming concerns about deteriorating domestic
demand in the world's No. 2 economy.
China's iron ore imports rose 13 percent from August to
84.69 million tonnes in September, the second highest monthly
volume on record, customs data showed.
The robust imports reflect continued strong supply from top
exporter Australia, said Train, adding that some shipments for
October may have been counted in September because of the Oct.
1-7 National Day holiday.
"Australia and Brazil's output should be stronger in the
fourth quarter plus there's potential for a little bit of
restocking on the mills' side that would keep demand reasonably
elevated and keep imports rising for the rest of the quarter,"
he said.
Six Australian iron ore cargoes were sold on the globalORE
platform in Singapore, five of which were 62-percent grade
material sold at between $83.50 and $84.50 per tonne, according
to the platform's website.
Those prices were up from deals done at just above $80 a
tonne on Friday for the same grade, suggesting further upside
potential for the benchmark price.
Benchmark 62-percent grade iron ore for immediate delivery
to China .IO62-CNI=SI rose half a percent to $79.90 a tonne on
Friday, according to data compiled by the Steel Index.
The price fell to $77.50 at the end of September, its
weakest level in five years.
"I think the price can stabilise around $80 for a while,
this is a price that looks acceptable for both suppliers and
buyers," said an iron ore trader in China's eastern Shandong
province.

Read more: http://in.reuters.com/article/2014/10/13/markets-ironore-idINL3N0S814X20141013
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Quote:
 
China steel now as cheap as cabbage, weighing on global price

Published: Oct 13, 2014 6:20 p.m. ET
By LauraHe

HONG KONG (MarketWatch) — As global steel prices face downward pressure from falling demand, the situation in China is making the problem all the more intractable, as overcapacity is prompting Chinese steel enterprises to cut their prices in order to boost exports.

Data from the China Iron & Steel Association (CISA) showed Monday that domestic steel prices have been falling for 12 straight weeks, with the Steel Composite Price Index down more than 13% compared since the end of last year, even as the nation’s construction activity and real-estate market are cooling significantly.

The average price for the range of steel products on offer has fallen to 3,212 yuan ($520) per metric ton for the first half of the year, down 28% from the average price in 2012, CISA data showed.

And as a People’s Daily report said Monday, the price level means the steel is now almost as cheap by weight as Chinese cabbage.

“Sharply slowing steel demand growth in an oversupplied sector is the key reason for China’s currently low steel prices,” CIMB analysts said in a recent note.

Standard & Poor’s also cited Chinese oversupply as the largest headache for steel makers in the rest of Asia, and is likely to remain so.

A recent survey by CISA said the steel-billet inventory of key enterprises was up 36% in July, compared to a year earlier, steel-product inventory climbed 21.3%.

Pressures arising from expanding inventories and sluggish domestic demand have made for cut-throat competition among China’s steel mills, resulting in meager profits. The margin for China’s large and medium-sized steel companies was 0.54% for the first seven months of 2014, CISA said.

And the problems are affecting the global markets too, as the Chinese firms cut prices to try to boost exports so as to make up for the weak domestic sales.

Customs data released Monday showed China’s net exports of steel product reached a record 7.2 million metric tons in September, up 4.5% from the last all-time high, posted in May, according to The Wall Street Journal.

That’s bad news for the exporters, as many of them are suffering from the price-for-volume strategy.

The average price for exported steel products was only $793 per metric ton in the first half of this year, down 9% from a year ago, with companies breaking even at that level, getting benefit only from associated tax breaks for exporters, CISA said.

Meanwhile, due to overcapacity, steel prices in both China and Europe have fallen more than 10% so far this year, while the price of iron ore — the key component for smelting steel — touched a five-year low in September, a Bloomberg report said earlier last week.

In a forecast issued last week, the World Steel Association said global steel consumption would likely post a slower pace in 2014 as a whole, with “weaker performance in the emerging and developing economies.”

Among the main contributing factors to the downbeat forecast, the association said, was China’s structural shift to its economy and the cooling-down of its property market.

Read more: http://www.marketwatch.com/story/china-steel-now-as-cheap-as-cabbage-weighing-on-global-price-2014-10-13
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