Daily iron ore price update (roll over)

A poor day yesterday across the ore complex with falls in Chinese steel leading iron ore spot and swaps lower. Here’s the ore chart:

And steel prices:

As I’ve been warning for a week or so, all of my metrics are overstretched. Unless rebar bounces the rally is done.

Interestingly, rebar is falling even as good statistics were published by the World Steel Association on rebounding steel production in October:

Brussels, 20 November 2012 – World crude steel production for the 62 countries reporting to the World Steel Association (worldsteel) was 126 million tonnes (Mt) in October 2012, an increase of 1.3% compared to October 2011.

China’s crude steel production for October 2012 was 59.1 Mt, up by 6.0% compared to October 2011. Elsewhere in Asia, Japan produced 8.8 Mt of crude steel in October 2012, a decrease of -6.7% compared to the same month last year.

In the EU, Germany produced 3.7 Mt of crude steel in October 2012, a slight increase of 0.3% on October 2011. Italy’s crude steel production was 2.4 Mt, down by -10.4% compared to October 2011. France’s crude steel production was 1.3 Mt, a decrease of -7.2% on October 2011. Spain produced 1.1 Mt of crude steel, -15.6% lower than October 2011.

Turkey’s crude steel production for October 2012 was 2.9 Mt, a decrease of -6.9% compared to October 2011.

The US produced 6.9 Mt of crude steel in October 2012, down by -3.3% on October 2011.

Brazil’s crude steel production for October 2012 was 3.2 Mt, an increase of 7.7% compared to October 2011.

The crude steel capacity utilisation ratio for the 62 countries in October 2012 declined to 76.5% from 77.7% in September 2012.  Compared to October 2011, it is 1.4 percentage points lower.

Whatever end-user demand there is, it is not enough.

David Llewellyn-Smith

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.

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