Find below the iron ore price table for August 24, 2013:
And the charts. Spot and 12 month swap are trading sideways:
But the rebar rally has run into resistence for now:
Rebar futures were up sharply Friday and are still signalling some headroom.
Our spread charts remain very over-stretched. Spot to swap is about 10% too high:
And spot to rebar about the same:
Chinese port stocks were flat and Indian sourced supply fell to a new low. I still expect iron ore to drift lower for the next few months.
In news, India continues to talk-the-talk of returning to export markets:
New Delhi, Aug. 22: The government will approach the Supreme Court to resolve the ban on iron ore mining and export as India needs to step up production of key resources to help contain the current account deficit.
“We have to find a way to export iron ore. We need to restart iron ore mining,” finance minister P. Chidambaram today said, pointing out that it was untenable that large stocks of iron ore lay idle at ports.
Iron ore mining came to a grinding halt in Karnataka, Goa and Odisha, three of the country’s biggest iron ore producing states, following an apex court interim judgment on a case filed to stop illegal mining.
The Supreme Court had banned mining in Karnataka two years back and had later relaxed the ban a bit. In September last year, a ban was announced in Goa, which accounts for more than half of iron ore exports from India. Odisha saw a ban being enforced in September last year. Only iron ore mining for captive use is allowed.
FIMI, the lobbying outfit for the mining industry, has been pleading for the ban to be lifted, pointing out that India was losing up to $11 billion from the mining and export ban.
The finance minister said the government was keen to get the “iron-ore mining sector back on its feet”.
India is struggling on through a current account crisis, best seen in the freefall of the rupee:
The usual way to fix a current account crisis is allow the currency to crimp imports and boost exports. That is so long as you can afford to survive for long enough without access to global capital. Fortunately for India, it has huge piles of iron ore sitting at ports and in the ground waiting for the country to get out of its own way. With the lower rupee, this could a very important part of stabilising the external account. As usual in India, logic may not be the prime consideration but I continue to believe that eventually it will win out and India will resume exports in 2014.
