Daily iron ore price update (conniption)

Texture from Reuters:

China’s central province of Henan has issued an orange smog alert, the second highest in the nation’s three-tier pollution alarm system, which will be applied to 12 cities.

The alert means pollution controls in heavy industries, including steel and coke, will be strengthened from Oct. 18 to Oct. 23.

In China’s top steelmaking city of Tangshan, where tighter production curbs have already been imposed, anti-smog emergency measures will reportedly be strengthened in response to authorities’ warnings of deteriorating air quality.

“The downtrend may continue in the next few months,” a Shanghai-based trader said, citing in particular Tangshan’s “very strict” steel production restrictions, and the slowing global demand for steel and iron ore.

“Steelmakers in Europe and in Japan seem to be also under pressure and are cutting production,” the trader said. “Global demand for steel is not very good, while iron ore supply particularly in China is more than enough.”

Quite. Though it remains an open question: what kind of restocking will we see over new year to offset these conditions?

To the charts:

My data source for spot appears to have had a conniption on Friday with normal service resumed today. Paper was a little stronger overnight. Steel is at the cliff’s edge and appears likely to fall of it.

More price correction ahead for the entire ferrous complex if so.

David Llewellyn-Smith
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