Here’s the iron ore price table for December 17, 2013:
Rebar futures were also hit. Here’s Dalian six month futures, which are still trading around $120 equivalent:
The key level to watch is $131. Spot has not traded below that since July. If we break through, it’ll likely portend a deeper pull back. The BDI capesize index is getting smashed but from recent highs:
I’m agnostic until $131 breaks.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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Rebar still sliding but billet is up and Baltic Dry still looks healthy so who knows, certainly I’m not willing to bet against rebar (or FMG) with stories like this:
http://www.steelfirst.com/Article/3290421/News/China-set-to-build-6m-units-of-affordable-housing-in-2014.html
6 million units of affordable housing IN 2014!!!! In one year they’ll build enough units to crash our entire market haha.
One story does not a summer make.
Isn’t that what you said about the cricket?
The 6 million figure is the same as that forecast last year and down 20% from the year before.
36 million affordable homes 2011-2015
https://theconversation.com/china-plans-36-million-affordable-homes-lessons-for-australia-19710
Interestingly the share prices of China listed property developers have been getting a pasting lately. Vanke broke to a new 12 month low yesterday.
That is interesting, thanks. Shibor rates have been creeping up again also, probably just keeping the housing ponzi going but I found it quaint that the Chinese talk, and do something about, housing affordability and here crickets.
Quite a few brokers predicting a rebound now.
affordable housing you wrote….. house prices in Shanghai and Beijing rose 18 and 16 pct in November
over same month last year and currently clipping just under 10 pct year-on-year
Baltic Dry unfortunately is not representative of the demand balance in China, its positionel and driven
by vessels supply sources coupled with a late rally (2nd in less than 3 month) and the fact that vessels
operators can afford to take a long christmas break. Besides the Composition of the Baltic Dry is not
really comparable because different sizes cant make up an overall marking.
Perhaps the London Metals Exchange nickel levels will start to dwindle faster than ligthening real
soon. That would be a few thinking I guess.
Today’s house price index shows prices still growing year on year, but decelerating rapidly and could soon stall. Most importantly big difference between Tier 1/2 cities and the rest. Many of the smaller markets are actually deflating on monthly basis. Dilemma for developers: land in tier 1 cities very expensive and difficult to acquire, while little demand elsewhere. The game may be drawing to a close soon.
If the game closes there will it drive even more this way?
Hot money is following hot money into any city in the world that fits the definition of a global metropolis. Outside these few “tier 1 cities”, not so much, but they do have a way of distorting the overall picture – e.g. look at London vs rest of UK.
From today’s China data 9 out of 70 cities show negative real month to month price growth for new housing stock and 24 out of 70 show negative real price change for existing houses. Slowing trend indicates next month likely to be worse.
http://www.stats.gov.cn/tjsj/zxfb/201312/t20131218_484007.html
@dexter +2