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