The great unreported corporate story of our time – the travails of Fortescue Metals Group – goes on. This afternoon the share price took out it’s intraday low for the year and was last trading at $4.53:
As much as I would like to find it, in technical terms I see no supports right down to last year’s low:
It is clear that RIO is now seriously out-performing FMG on the way down, a reversal of the way up:
The iron ore price remains far below. Both Dalian and rebar futures are getting trashed in China with rebar down 1.5% at new historic lows and Dalian futures down 2% to 724. From Reuters:
“The future is not encouraging for the steel market. Demand is not as strong as many had expected yet steel production remains very high,” said an iron ore trader in Shanghai.
Large steelmakers in China produced a record high 1.824 million tonnes of crude steel in the first 10 days of May, data from the China Iron and Steel Association showed.
…”Many in the market think the price will go below $100 so they’re waiting rather than take any action. For most businesses, the focus now is not to lose money rather than make money,” said a trader in Tianjin.
Chinese mills are among those selling iron ore cargoes in the market, putting even more pressure on prices.
“We have been contacted by two big mills who said they want to sell three capesize cargoes that are still at sea or have not been loaded,” said the Shanghai trader.
“I think they have enough inventory of iron ore at the moment and they want to get some cash back.”
