Iron ore charts for April 12, 2017:
CRRRAASSSH. Not before time the iron ore bubble is comprehensively bursting. Tianjin benchmark free fell 6% to $67.90. Paper actually firmed a little overnight though is still down. DCE September futures are now pricing in the $58s. SGX twelve month futures $56. Both are far too high still. Coking coal futures were slaughtered as well and are now pricing $134 for September. Also too high. Rebar average has not updated but Shanghai fell -4%.
The set up remains incredibly bearish. Steel mill margins are rocketing even as the price deck deflates, motivating them to overproduce. Thus the steel price will keep falling as well. Worse, it appears we’re going to wipe out a large part of the bubble pricing without reducing much of the enormous inventory overhang that the bubble built, leaving the market very unbalanced going forward.
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