Here are Friday’s closing prices for iron ore:
And the charts. First, Chinese steel:
In short, prices fell again, despite rumours of monumental regional stimulus packages. There is clearly still fundamental weakness in the steel market. And for ore:
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The price of $116.20 is right on the neckline support of last year’s crash at $115.89 is the ominous head and shoulders pattern.
But 12m swaps are rallying now and I’m not surprised. There are mounting reasons for traders to buy the market: Chinese stimulus rumours, European QE, US QE etc. And check out China’s coastal bulk shipping indexes, both bouncing:
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My guess is we are close to a short term bottom for ore and the bottom looks in for thermal coal, for now.