Here are the iron ore charts for April 14, 2014:
Iron ore paper market softness continues. Physical is more firm, supported by the rebound in steel prices. Rebar futures fell a little and that market is moving into backwardation. The Baltic Dry capesize component fell 1.5% yesterday.
Reuters has texture:
“I think seasonal demand will not provide much support for steel prices because production remains the same. Overcapacity is the key issue and if that’s not solved, that means you will never be able to see a sustained increase in steel and iron ore prices,” said a trader in Shanghai.
“Some mills have already finished their short-term replenishment of iron ore so buying interest has shrunk since the end of last week,” said the Shanghai trader.
“They also expect the price would fall again because there is pressure from the huge supply.”
Iron ore for immediate delivery to China .IO62-CNI=SI dropped nearly 2 percent to $116.90 a tonne on Friday, said data
compiler Steel Index.“The fall reflected much lighter interest from Chinese steel mills, shying away from the spot market amid the recent step up in prices. Credit conditions remain tight for the sector despite near-term fundamentals improving,” Australia and New Zealand Banking Group said in a note.
With the restock phase passing, we’ll now be at the mercy of fundamental demand and will need to see the rebar rally continue for iron ore to hold its ground. That seems a reasonable prospect today, for a little while.
