Daily iron ore price update (the crapening)

Texture from Reuters:

Steel glut in China and seasonally weak domestic demand for the metal weighed on prices in recent weeks, including those of steelmaking raw materials.

The slump in steel prices along with higher cost of raw materials — iron ore still trades above 2018 price levels despite its pullback from five-year highs — are putting strain on the profitability of Chinese steel mills.

Some of them have thus decided to reduce output to prop up prices and curb production costs, while waiting for steel demand to pick up.

“For now, maybe we will see the market getting stable for a short period,” a Shanghai-based trader said. “At the moment, many market players are just doing nothing except monitoring the market.”

Some steel mills, he said, have taken a cautious stance in buying raw materials. “Some of our clients told us they are not going to buy any spot (iron ore) cargoes at the moment while prices are still volatile.”

We’ve got another six weeks of weak seasonality to go yet!

We may need to see more progress from Vale to get us to $60 but I’m still in with an odds-on shot as steel keeps falling. To the charts:

Spot at new correction lows. Paper is holding on desperately. Steel has one foot off a cliff’s edge.

Going lower!

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