The ferrous complex was mixed on September 10, 2021 as spot fell, paper was flat but steel lifted:
Chinese iron ore inventories are rising again, hitting 131mt last week:
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That China has rising iron ore inventories amid crashing prices tells us all we need to know about the slackness in the market.
The cartel knows it. Port Hedland shipments slipped in August as BHP does some port repairs, along with the myriad of problems that RIO mysteriously discovers every few months. Now add Vale:
Brazilian red tape may keep the global iron ore market tighter than expected after Vale SA lowered its forecast for production capacity because of sluggish permitting.
While capacity isn’t the same as actual production, the slower-than-expected expansion will give Vale less scope to increase supply over the coming years.
Vale’s ongoing recovery from an early-2019 tailings dam disaster makes it a major swing factor in a market that’s looking for direction after tumbling 40% from a mid-July peak amid China’s efforts to curb emissions.
On Thursday, the Rio de Janeiro-based company said it’s targeting production capacity of 370 of million metric tons next year, compared with a previous 400 million-ton goal.
Amusing stuff. At a certain point, these attempts to manipulate supply may make a difference but not when the price is still so damn high.
No change for me. As demand collapses in China, $100 this year and $60 in 2022.
Lots more pain ahead.