Here are the iron ore charts for February 20,2014:
Nothing all that bad here. No technical breakdowns as the falls were modest following the fugly PMI. I can’t improve much upon a quote from Reuters:
Weaker steel prices may sour appetite again among traders and Chinese steel producers for spot iron ore cargoes, and likely to drag prices back to seven-month lows reached last week.
“This is really quite worrying,” said Helen Lau, senior mining analyst at UOB-Kay Hian Securities in Hong Kong.
“This means any seasonal recovery in steel demand when construction picks up from March will not be as strong as before because overall economic activity is slowing down.”
…”Traders will soon destock since it will be very risky to keep such a high level of stocks. If they continue to restock there will be a lot of supply in the market which will send prices even lower,” said Lau.
There’ll be a seasonal recovery in steel demand. But whether will it be enough to justify already very high steel inventories and a huge iron ore stockpile is the question!
