Find below the iron ore complex price chart for 24 January, 2013:
And the chart:
Another slow day on the hustings with swap balking at its former high and spot still showing strength, apparently on Pilbara weather and some strength in Baosteel contract prices.
In news, today’s point of interest is the shorts of David Einhorn, hot-shot hedgie, who described iron ore as a bubble last October but has since suffered indigestion from his bet. From the WSJ:
“Our bearish thesis on iron ore is new, and we have shorted a number of stocks in the sector. Our view is that after a decade-long bull market, supply is now exceeding demand. On the supply side, the miners have spent billions preparing to expand supply, which is poised to grow about 15% in each of the next couple of years. At the same time, iron ore is used to make steel, and global demand for steel is currently growing at just a couple percent per year. The marginal cost of the new iron ore supply coming on line is very low. We expect that some of the large investments the miners have made will yield disappointing results as the price of iron ore falls. In the fourth quarter the price of iron ore and the related stocks rallied sharply. Given the considerable downside in the stocks, we are willing to be patient here.”
