Daily iron ore market update (absolutely smashed)

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Here are the iron ore charts for September 1, 2014:

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Paper markets tanked, including rebar futures which are at new record lows. In physical, spot is at a new low for the move and just 50 cents above the post-2009 low. There’s no contango any more and it’s going to break. Worse, steel prices just keep falling indicating that the entire price deck is shunting lower with any rebound distant and likely very subdued. Texture from Platts:

“The large international traders still have a lot of cargoes they have yet to sell off, and the medium and smaller ones don’t dare to buy more because sentiment is so negative,” a Shanghai-based trader said. “Overall, very little material is actually changing hands and there is really no buying interest at all…I doubt there will be much of a recovery at all in September and October as the supply overhang of seaborne cargoes this year is a big issue. Prices can’t lift because of that.”

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.