Daily iron ore price update (twirling, twirling, twirling towards freedom!)

Find above the iron ore price complex chart for December 11, 2012. Here is the ore chart:

And steel chart:

Pretty clearly, spot iron ore has broken free of fundamentals, associated prices and all sense, twirling, twirling, twirling towards freedom!

My spread charts are now registering dangerous over-stretch for this price range. Swap versus spot:

And rebar versus spot:

Once a market begins twirling towards freedom who knows where it ends? A reversal is in the offing in the not too distant future.

David Llewellyn-Smith
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Comments

  1. Some exuberance that support will come from Chinese rail construction – a number of major projects have been announced.

    http://www.steelprices-china.com/news/index/2012/12/10/Mzk0MTM%3D/Railway_infrastructure_will_fuel_steel_demand_in_China.html

    “…recovery would rely not so much on export growth and resurgent housing prices as on consumption, infrastructure investment and development in western and central provinces…”

    “…government-backed infrastructure investment would be the primary engine driving growth…”

    We await official announcement.

    http://english.caixin.com/2012-11-26/100465130.html