Daily iron ore price update (and the award for the dumbest Budget ever goes to…)

The Australian Treasury. We have surely just set a new world record for the speed at which a national Budget comes unstuck. The Tianjin benchmark iron ore price fell -3% Friday to $57.70. Remove freight costs to get the Budget’s FOB price equivalent and we are now at roughly $52.70 and nicely below the Budget’s $55 outlook. It took three days. Indeed there are still eight weeks before the Budget time frame even begins. By then the odds favour laughing stock status.

Here are the wider charts:

Paper rebounded strongly Friday night but that double top looks impressive and it’s odds on any rebound is of the dead cat variety. Singapore yawned, rebar average is tumbling (that is the real thing not the futures) and, perhaps most importantly, Chinese port inventories of iron rocketed 1.35 million tonnes. Chinese steel mill iron ore inventories are also well off their lows. China is not using the volumes of ore it is importing. It is stockpiling them which means that its domestic production has rebounded enough to push us back past supply equilibrium and the next move is down.