Find below the iron ore price table for October 9, 2013:
Firm then.
But the action today is all in the news, with the eponymous Tom Price of UBS (pictured above on a recent Pilbara tour) back and bearish:
Prices for the steel ingredient could fall as low as $US70 a tonne including freight around the end of October, from a landed price in China of about $US130 at present, due an expected seasonal drop-off in steel production rates, UBS commodities analyst Tom Price said in Sydney on Wednesday.
After a dip to $US110 a tonne in June, iron ore prices held up better than many expected through the September quarter. But UBS reckons the chances are still high of a sudden decline. While that is likely to cause panic among some equity investors, the bank is recommending investors use it as a buying opportunity because the drop should be short-lived.
…UBS believes the price slump, if it occurs, would last only a few days, and retains a full-year average forecast for iron ore in 2013 of $US120 a tonne, before freight and insurance.
It expects the average price to slide to $US110 next year, then continue to decline to reach its long-term price forecast of $US72 in 2016.
And they say I’m bearish. I disagree with this. Last year’s price slide was a combination of several factors: high Chinese ore inventories; tight liquidity and a pre-stimulus, slowing Chinese economy, plus falls in demand in Europe that diverted material to Asia.
Those factors are still in play but are much less severe: ore inventories are reasonable; the Chinese economy is in the throws of a material stimulus package and global conditions have improved.
It is simple fact, too, that prices have been more stable this year on these conditions.
I still think we’ll get the seasonal drop but not to $70. More like $120, maybe $110. If so, we’d then see only a subdued restock as well. Steel remains in plentiful supply.
