And to close the week, it could only be one final iron ore post. From Reuters:
Iron ore is set to fall for a sixth straight month in May in its longest losing streak on record, with hefty supply pushing prices to their lowest since September 2012.
…Panic is creeping in among some traders in China who picked up cargoes when the benchmark price first fell below $100 a tonne last week.
“We have three capesize vessels of 56-57 percent grade iron ore which we bought at $84, $80 and $76 per tonne. Now the price is around $73-$74. We are trying to sell as soon as we can because the market keeps descending everyday,” said a trader in China’s eastern Shandong province.
Australian miner Fortescue Metals Group has been offering a 12-percent discount to the Platts 62-percent iron ore index for June cargoes, traders said, reflecting increasing competition among suppliers to China.
These are the grades that make up a lot of FMG sales. If it is break even in the low $70s then…well…you get he picture.
Here is one last iron ore bull, too, trotting out the same old arguments:
- urbanisation is awesome (but there’s no reference to rates of change)
- expensive Chinese ore (but no reference to its probably protectionsim)
- anti-pollution drive to boost imports (but no mention of the effect demand)
- he sees $110 for several more years
Mike Komesarrof is actually an excellent analyst, and widely respected, so if he’s repeating these troubled arguments then that offers an insight into why local shares are holding up so well.
I’m on holiday next week and the more than able Chris Becker will fill in.
