Here are the iron ore charts for November 3, 2015:
It’s free fall time as Tianjin broke down 0.8% to $48.70. Paper is in free air with Dalian down another four points after yesterday’s shellacking to a record low of 348. Singapore likewise is heading deep into the $30s. Rebar has bottomed for now signalling that steel mills are cutting output, which we will see in data in a few weeks.
The mix is highly toxic for iron ore prices. Notice that we are not collapsing. This is not a cyclical destock. Rather it is a structure of too much ore meeting not enough steel and inventories of the former are still rising. That means no end to price falls until supply comes out. The next to die is the roughly 40 million tonnes produced by the Australian juniors but they can last for months yet so we could just keep on falling and falling here.
