The iron ore price table for November 22, 2013 is below:
The spooky stability of spot continues and you may have noted as well that 12 month swaps a re drifting up towards $120. Rebar appears to be flattening out so there ‘s easing concern that falling steel mill profitability will trigger a destock.
What is most interesting in today’s data is that Chinese port stocks surged again last week 82.6 million tonnes, a new high for the year:
Here’s the longer term chart:
For now this is bullish for spot as it is evidence of some return of hoarding. It should help support prices through the end of the year.
But, it also builds the risks for next year. As you can see, the big swing in Chinese port stocks coincided with the huge price dump of 2012 (though it lagged it somewhat) so as the port store of ore rebuilds the potential for a big destock when the market balance shifts grows with it.
Second quarter 2014 is shaping up as very interesting, as Goldman has been arguing. The current rally in iron stocks is not a bad place to position a medium term short.
