Daily iron ore price update (the rocket returns)

Find above the iron ore price table for December 7, 2012.

As you can see, spot hit the afterburners. Last week’s Politburo rhetoric and a little support from rebar seems to have sent traders barmy bullish. Good for them, what’s the evidence? First, here’s the ore chart:

And the steel chart:

Local bulk shipping rates are still in the dunny:

So, the rally look more like hope than current reality. And who knows, there may well be a spike in the new year. All I can say is that the spreads make spot look over-valued already. Spot to swap is still elevated for this price bracket:

And spot to rebar is hitting new wides:

This is a classic preemptive move by the spot market. We’ll need to see significant strength in spot sales in the new year to support it. We’ll get some but I remain cautious.

David Llewellyn-Smith
Latest posts by David Llewellyn-Smith (see all)