Iron ore can coking coal futures are holding last night’s gains at the open in Dalian:
But Big Iron does not care as BHP opens on a new correction low and RIO, as well as FMG follow:
Vale has spooked the market with ordinary earnings and a pledge to return Samarco to production in H2. The Australia sees a buy:
CHARTS: BHP Billiton looks a buy here
BHP Billiton is certainty testing the bulls with a fresh 4.5-month low of $23.32 this morning.
This is marginally below last week’s low at $23.33 and could force some weak longs to exit — however the chart still looks bullish on a weekly close basis.
Last week’s bounce off $23.33 formed a bullish hammer pattern, the significance of which was reinforced by the close above the weekly uptrend line from February 2016.
Note that Citi upgraded BHP to ‘Buy’ vs. ‘Neutral’ on Wednesday, targeting $28.50. The view is that BHP will still make plenty of cash even if commodities retreat a bit further.
Moreover despite BHP’s negative comments on iron ore yesterday, these arguments are well known, and the iron ore price appears to be stabilising after a 32 per cent fall.