Picked a slightly odd day for it with the dollar up on the capex figures but interest rate markets have begun to price rate cutsin the year ahead for the first time since March:
It’s the iron ore shock that’s weighing. The miners are all sliding nastily into the close with RIO down 2.5%, FMG down 3% and AGO down 4% and having broken its 5 year support line. The texture from Reuters is sounding like my Q3 shakeout is happening right now:
“There’s no lack of cargoes being offered in the market, the lack is on the buying side,” said an iron ore trader in Singapore.
“We ourselves have 4-5 million tonnes that we need to sell over the next four weeks because the cargoes are arriving in China. We’re a bit concerned that we’ve been unable to find buyers.”
…The lower raw material cost is helping improve profit margins of Chinese steelmakers to between 100-200 yuan a tonne on average, said a Shanghai-based trader.
“But they’re not confident buying a lot of iron ore at this time given there’s a lot of it around. There’s a high chance we could see $90,” he said.
