Iron ore prices that soared amid China's speculative frenzy last month just took another leg down, plummeting as rising port inventories in the top user spurred concern global supplies are once again topping demand.
Ore with 62 per cent content sank 6.7 per cent to $US51.22 a tonne on Monday, taking losses from the peak of more than $US70 in April to 27 per cent, according to Metal Bulletin. The drop, the most since March 9, was preceded by a slump in futures in Asia, with the SGX AsiaClear contract falling as much as 6.3 per cent to $US45.72 as futures in Dalian closed at the lowest since February.
Iron ore has been on a tumultuous ride this year as investors sought to gauge conflicting economic signals from Asia's biggest economy against still-elevated port stockpiles. In China, traders piled into raw-material futures including iron ore in March and April, helping to boost prices, only to switch track when regulators clamped down. Inventories at ports have climbed above 100 million tonnes, offering fresh evidence of increased supplies from Australia and Brazil, and BHP forecast last week that there may be further increases. The price of iron ore for delivery to the Chinese port of Qingdao fell 6.7 per cent overnight; it has fallen 27 per cent ...
The price of iron ore for delivery to the Chinese port of Qingdao fell 6.7 per cent overnight; it has fallen 27 per cent since April 21.
"Stockpiles have once again broken the 100 million tonne-level, indicating that supply pressure has increased significantly," Fan Lu, an analyst at Sinosteel Futures, said in a note on Monday. "Mills' margins have narrowed as steel output recovered," suppressing demand for iron ore, she said.
The port inventories swelled 1.6 per cent to 100.45 million tonnes last week, the highest level since March 2015, according to data from Shanghai Steelhome Information Technology. They're up 7.9 per cent this year. Miners' shares retreated in Sydney, with BHP Billiton, Rio Tinto Group and Fortescue Metals Group all lower on Monday.
As iron ore has sunk, other steel-making raw materials and products have also declined. Rebar futures in Shanghai fell 5.6 per cent on Monday to close at 1947 yuan ($US297) a tonne. Most-active prices had rallied to as much as 2787 yuan about a month ago. The coking coal contract in Dalian plunged.
Goldman Sachs was among banks that said the prices seen during the speculative frenzy would not last as oversupply was likely to return. Last week, Vale's Claudio Alves, global director of iron ore marketing and sales, said there was a need to prepare for tougher times ahead.
Australia and Brazil will export a combined 1.24 billion tonnes this year compared with 1.13 billion in 2015, according to Australia's Department of Industry, Innovation & Science. As the country's top miners boost output this year, smaller rivals are also raising supply. Atlas Iron, partly held by Glencore, said on Monday that it shipped record volumes in the first three months of this year.
"Australia and Brazil have kept shipments at relatively high levels," said Zhao Chaoyue, an analyst at China Merchants Futures in Shenzhen. "Shipments will probably continue at high levels without many hiccups. Port inventories in China will continue to accumulate."
There are some people who seem angry and continuously look for conflict. Walk away, the battle they are fighting isn't with you, it's with themselves.
The first lesson of economics is scarcity: There is not enough of anything to satisfy all who want it. The first lesson of politics is to disregard the first lesson of economics. ~ Thomas Sowell.
Who was the fool, who the wise man, who the beggar or the Emperor? Whether rich or poor, all are equal in death.
You think the big miners were lying to the investors?
Isn't that against the continuous disclosure obligations as an ASX listed company?
Hmmmm?
I would not trust them as far as I could throw them.
You are a surprise package Golly you trust big corporation newspeak, you own 4 properties yet you spend all your time on here spruking fear into the property market. What really is your game? Do you make money with doom and gloom somehow? eg selling a blog site.
Definition of a doom and gloomer from 1993 The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
I would not trust them as far as I could throw them.
You are a surprise package Golly you trust big corporation newspeak, you own 4 properties yet you spend all your time on here spruking fear into the property market. What really is your game? Do you make money with doom and gloom somehow? eg selling a blog site.
Golly doesn't own anything, if he makes modifications or fails to pay taxes they will be taken off him so by his own definition he doesn't own them.
$52.70 today, USD is strong. This a 10 week low, so much for newjez, golly, rastus, hidflect, kodiak and jimbo's calls of $20/t iron ore.
I'm not calling $20/T, I'm calling $17/T. By Christmas.
And are you still calling a huge price crash in Perth hey?
You seem to go for some out there predictions.
Definition of a doom and gloomer from 1993 The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
Why don't you Hyperlink where I called $20/t Iron ore before you crawl back under your bridge.
No wonder you wanted to shut this thread down...
Ouch Iron ore is imploding -- now down 27% in just weeks
Tell me, is your nickname trollie because that is what you push for your work ?
I'll think you'll find that many suburbanites subconsciously believe that things will "return to normal" and low iron ore prices doesn't fit within that mental construct.
Why don't you Hyperlink where I called $20/t Iron ore before you crawl back under your bridge.
No wonder you wanted to shut this thread down...
Ouch Iron ore is imploding -- now down 27% in just weeks
Tell me, is your nickname trollie because that is what you push for your work ?
Where did I call $20 a tonne? I was the one saying they were overly optimistic. If it goes below $40 for any ! length of time you will get consolidation in the industry, which will boost the price back up. Any trip below forty is a holiday.
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