Daily iron ore price

The rally continues, this time in Chinese steel prices as well:

And the charts:

Comments

      • Maybe not, maybe Peter’s read this article on Zero Hedge…quoting from Reuters

        Chinese banks and companies looking to seize steel pledged as collateral by firms that have defaulted on loans are making an uncomfortable discovery: the metal was never in the warehouses in the first place.

        China’s demand has faltered with the slowing economy, pushing steel prices to a three-year low and making it tough for mills and traders to keep up with payments on the $400 billion of debt they racked up during years of double-digit growth.

        As defaults have risen in the world’s largest steel consumer, lenders have found that warehouse receipts for metal pledged as collateral do not always lead them to stacks of stored metal. Chinese authorities are investigating a number of cases in which steel documented in receipts was either not there, belonged to another company or had been pledged as collateral to multiple lenders, industry sources said.

        Ghost inventories are exacerbating the wider ailments of the sector in China, which produces around 45 percent of the world’s steel and has over 200 million metric tons (220.5 million tons) of excess production capacity. Steel is another drag on a financial system struggling with bad loans from the property sector and local governments.

        “What we have seen so far is just the tip of the iceberg,” said a trader from a steel firm in Shanghai who declined to be identified as he was not authorized to speak to the media. “The situation will get worse as poor demand, slumping prices and tight credit from banks create a domino effect on the industry.”

        http://www.zerohedge.com/news/how-chinas-rehypothecated-ghost-steel-just-vaporized-and-what-means-world-economy

    • oh noes the iron ore going to $0 meme is over… good thing the forecast merchants never put any money on their predicitions

      • i was just pointing out the similarities between those who incorrectly thought there was an iron “floor” price at the marginal cost of production, and those in property who still incorrectly think there is “floor” price for property at the marginal cost of production.

    • Have no fear, I’m sure that iron ore will drop below $100/T again.

      That’s what a lot of potential home buyers and investors are thinking, Pete, including me. It’s just more reason to sit on our hands, ol’ buddy.

      • Lol – it might work for you in Perth if it’s tied to the price of iron ore, which it loosely is.

        Cheers…

  1. “Have no fear, I’m sure that iron ore will drop below $100/T again.”

    Sooner or later likely yes I’m thinking, since the current rally in ore and steel prices doesn’t appear to be underpinned by any great increase in actual usage for the material.

    There’s been two seperate rallies in the stuff over the past two weeks, both look speculative in nature.