Daily iron ore price update (firm)

Here are the iron ore charts for December 5, 2014:

Paper markets held up and physical rallied. Port iron ore stocks dropped another 1.05 million tonnes. There is a ray of light in this data. Whatever the iron ore surplus currently, it is not enough for mills to force down the price without depleting inventories. The problem is the inventories are still very large.

In less hopeful news, rebar average is poised to fall to new lows, although the last chart shows you that steel mill profitability should be excellent because raw materials have fallen so much further, so long as they are using imports. Even so, if rebar continues south we can expect iron ore to join it.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.