Here are the iron ore charts for May 27, 2014:
More subdued action. Paper markets were basically sideways including rebar futures. Physical iron ore is down a bit but at least rebar average has bottomed. However, the Baltic Dry capeszie component jumped 6.5%. There’s a little buying interest.
News of the day belongs to the fortnightly release of high frequency CISA steel output data which was down 1.3% in mid May to 1.801 million tonnes from 1.824 million tonnes.
It’s not looking very good for underlying demand suddenly with inventories leaping 5% to 15 million tonnes at major mills.
Normally peak production is another month or so away but not always, chart from Citi:
I reckon 2012 is the best model to follow for this year given the similarities in the trajectory of property demand. We could already be past peak steel production for this year.
