Daily iron ore price update (iron snoreting ends)

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Here are the iron ore charts for October 20, 2014:

iluv uibo liub .uib sdfiwb

Better price action. Paper markets were solid though don’t forget that once charges and taxes are removed Dalian is still pricing in the mid-US$70s for January delivery. In physical, spot was firm too and the rebar rally continued, however it remains very much driven by price rises in Hebei which are artificial given the looming APEC shutdown. Baosteel and China Steel (in Taiwan) cut prices.

In an interesting development, Chinese port stocks of iron ore fell by 1.35 million tonnes last week. As I always say, one must be cautious in interpreting port stocks as immediately market sensitive, but it does rather suggest that steel mills and traders have destocked enough that attempts to push down iron ore prices now requires the depletion of inventories. By comparison in May, for instance, as prices fell, port inventories rose. This adds to evidence that something of a base is forming for iron ore at $80 for now.

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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.