Daily iron ore price update (unexpected)

Texture from Reuters:

Steel inventories in China stood at 11.4 million tonnes as of Oct.7, up 594,100 tonnes compared with the week ended Sep. 26 but still the second lowest since late June, according to data from consultancy Mysteel.

“Output curbs have eased after the National Day holiday, which piled pressures to (the) supply side,” Huatai Futures wrote in a note. There is limited room for a rebound as the January contract is seasonally weak, it added.

“We are seeing weakness in the iron ore price. There is a trend where steel mills are looking to reduce their production,” said Darren Toh, steel and iron ore data scientist at Singapore-based Tivlon Technologies.

Where steel goes iron ore will follow. To the charts:

ctedly

Spot was unexpectedly hit ahead of paper. Steel is still precariously poised. We could go either way here on weakening demand versus restocking.

David Llewellyn-Smith

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

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