The Friday close for iron ore was not pretty. Here are the key prices:
And the charts, first steel:
And now ore:
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Shanghai rebar and iron ore 12m swaps have broken their October lows well and truly. It’s clear air below. Spot will follow.
No idea how low this goes, but I wouldn’t be at all surprised to see an acceleration from here this week. These look like head and shoulders patterns with broken necklines.
Moreover, the World Steel Association released its June figures Friday and there’s not much hope there:
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World crude steel production for the 62 countries reporting to the World Steel Association (worldsteel) was 128 million tonnes (Mt) in June 2012, a decrease of -0.1% compared to June 2011.
World crude steel production in the first six months of 2012 was 766.9 Mt, a slight increase of 0.9% compared to the same period of 2011. North America and Asia showed an increase of 7.2% and 1.6% respectively (USA 8.4% and China 1.8%) while the EU (27) and South America recorded negative growth of -4.6% and -3.5% each.
China’s crude steel production for June 2012 was 60.2 Mt, an increase of 0.6% compared to June 2011.
Elsewhere in Asia, Japan produced 9.2 Mt of crude steel in June 2012, up by 3.5% compared to the same month last year. South Korea’s crude steel production for June 2012 was 5.9 Mt, an increase of 4.3% compared to June 2011.
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.
