Here’s the latest from Reuters in iron ore:
Surging coal prices are prompting many Chinese steel mills to opt for higher grade iron ore to boost efficiency and use less coal, forcing suppliers of low-grade ore from India and Iran to offer deep discounts to attract buyers.
At an annual iron and steel conference in China’s port city of Dalian, low-grade iron ore suppliers scoured for steel mills in a packed hotel lobby, hoping to find new business.
“No discount, no buyer,” said a Chinese trader who sells Indian iron ore with iron content of less than 60 percent, which is considered low grade.
On average, he said, he sells 57-percent grade material at 18-19 percent discount to the Platts pricing index.
Another supplier of Indian iron ore said he was giving the same discount to his clients, a practice that started in January. It came to 20 percent in June when iron ore prices dropped to near four-month lows.
“It’s very difficult to sell because of excess supply,” he said.
But no, instead it’s dog > bell > salivate > buy big iron:
Perhaps it is I that is the dumb money, focused on such things as:
- fading demand;
- port destocking;
- crushed steel mill margins, rebuilt steel stocks and
- rolling new supply.
These will overcome eventually but for today it’s back to Pavlov’s market with Dalian up another 1% at the open and BHP 2.7%, RIO 2.8% and FMG 5%.
Big gas is the same, though its rally looks more of the dead cat variety with WPL 2.2%, OSH 0.6%, STO 2.2% and ORG 2.9%:
Big Gold is tearing the roof off again too with NCM 6.4%, RRL 6.3%, IGO 5%, SBM 5.4% and EVN 6.3%:
Even the banks are up with CBA 0.5%, WBC 0.5%, NAB 0.8% and ANZ 0.5%:
With markets marginalising the BoJ and the Fed in full panzy mode, this code run a bit with a weaker USD. Ding, ding, ding.
