Daily iron ore price update (Brazick)

Iron ore prices for June 19, 2020:

Everything roughly stable on Friday. Port stocks edged up.

One bearish signal has emerged, the BDI:

Via Reuters:

“Most of the strength is due to increased Chinese steel mill demand for iron ore coupled with the increased production and exports out of Brazil,” said Randy Giveans, vice-president, equity research, at Jefferies.

“The length of the rally will all depend on how aggressive China is in restocking their depleted inventories as well as the ongoing recovery and stimulus activity in Asia.”

Traditionally the BDI was a great indicator for rising prices but these days it is the opposite if it signals more volumes out of Brazil.

That said, the virus remains an exploding risk:

And empty apartment demand is still strong:

What is most remarkable about recent price action is that it has resisted strong seasonal weakness in June. We may see some price drawdowns over the next few weeks but the underlying message remains iron ore prices higher ahead.

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