Here are the iron ore charts for July 30, 2014:
Equilibrium persists across markets. The BDI cape is still becalmed. Reuters has texture:
Iron ore would need to see aggressive restocking by Chinese mills for the price to break out of its current range, said Graeme Train, analyst at Macquarie Capital Securities in Shanghai.
“I just don’t think conditions are quite like this. Chinese steel demand is holding up okay, but I don’t think it’s getting much stronger. The mills are not in a mood to go out and do a massive restock just yet.”
“I don’t really see any long-term support for prices at the moment because a lot of cargo is still coming in. We expect Brazil to pump more cargo in August and September,” said a Shanghai-based iron ore trader.
“I think there is enough material around that is incentivised when prices are at $90-$100 and that makes it difficult to get any real tension in the market to get prices going higher,” said Train.
“But to get prices down to $80, you’d have to have quite a shock in demand. I don’t think (excess) supply alone can do it.”
Coulda fooled me. Supply got us from $190 to $90 after all. It will get us to $80 all right. Periodic demand shocks will dip it to $70, the real question is when…
Vale appears to have sobered up after its string of ridiculous statements about price rebounds recently. From BS:
The company has upgraded its estimate for supply growth in the so-called seaborne iron ore market this year to 140 million metric tonnes from 120 million tonnes, Jose Carlos Martins, executive director of Vale’s ferrous and strategy division, said in a conference call. Earlier-than-expected production ramp-ups by Australian miners and scant rainfall in Brazil contributed to the increase.
On the other hand, demand for steel in China has fallen short of expectations, Mr Martins said.
Unfortunately, the CEO stepped in with another clanger. Also from Reuters:
Analysts following Brazil’s Vale should stop obsessing over iron ore prices and Chinese demand to focus instead on the company’s other divisions and cost cuts, the miner’s chief executive officer said on Thursday.
Vale missed profit estimates owing exclusively to iron ore price falls which are shipped to China. Where are analysts supposed to look?
