Daily iron ore price update (the end is nigh)

Here are the iron ore price charts for November 18, 2014:

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Paper markets are in full conflagration for steel and iron ore. Physical is capitulating. Qingdao was down 4.4% to $71.80 and benchmark down 4% to $72.10 yesterday. Basically, I think we are pricing the lion’s share of the forthcoming glut right now and it is not over.

Texture from Reuters:

Chinese iron ore and steel futures tumbled to record lows on Tuesday after data showed a deepening decline in China’s home prices, the latest evidence of economic weakness in the top consumer of both commodities.

…Iron ore for May delivery on the Dalian Commodity Exchange fell 3.9 percent to close at its downside limit of 487 yuan ($80) a tonne, its weakest since the bourse launched iron ore futures in October 2013.

…A breach of the 500-yuan support level fueled more selling on the Dalian contract, said a trader in China’s eastern Shandong province who trades Dalian iron ore futures and predicts a further drop to 480 yuan before any recovery.

“The price has stayed around 500 yuan for about two weeks and the level was finally broken today. People think the market will fall further because supply is much more than demand.”

In other news, RIO is readying another massive mine, from the SMH:

The state’s Environmental Protection Authority has awarded conditional approval to the greenfields Koodaideri mine and infrastructure proposal, which was submitted by Rio Tinto subsidiary Mount Bruce Mining.

If approved by the state’s Minister for Environment Albert Jacob, the mine is expected to produce up to 70 million tonnes of iron ore a year for a mine life of 30 years. Rio’s Pilbara division is on track to export about 270 million tonnes in the 2014 calendar year, so the new mine would contribute a meaningful amount to the company’s production volume, as well as sustaining pressure on the region’s smaller miners.

This is part of the push to 360 million tonnes commencing mid next year if the board gives approval before April.

The laugh of the day goes to Roper Bar:

Argus reported that the administrators of Australian mining firm Western Desert Resources have put the Roper Bar iron ore mine in Australia’s Northern Territory up for sale.

Roper Bar shipped 464,396 wet metric tonne of iron ore during April and June and had been expected to raise production to 3 million tonne per year over the next year.

WDR called in the administrators on 5 September after negotiations with Macquarie Bank to secure short term funding failed. Its board of directors blamed the weak iron ore price and the strong Australian dollar for its failure. WDR was the second Australian iron ore mining firm to call in the administrators in two months.

Here’s two bob.

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