The ferrous complex was mixed on September 28, 2021 as spot iron ore plunged, paper did a bit better overnight and steel rallied:
The Baltic Dry is going crazy:
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It really is back to the pre-GFC good old days with inflation mania, energy bubbles and panic buying:
* The capesize index advanced 722 points, or 9.5%, to 8,322, hitting its highest in 13 years.* Average daily earnings for capesizes, which transport 150,000-tonne cargoes such as iron ore and coal, rose $5,983 to $69,013.
* “High iron ore export seasonality, surging demand for coal imports amid an energy supply crunch both in Asia and Europe, along with high capesize congestion in Chinese ports are driving the capesize rates – trans-Pacific leading the capesize freight rally at this point” said Tamara Apostolou, analyst at Intermodal Research.
* “The outlook for the Baltic index is positive for the rest of the year but slight volatility is expected. There might be some slowdown in cargo procurement next week as it is the Golden Week in China, but any effect on freight will depend largely on the pace of congestion release,” added Apostolou.
I expect the fate of it all to be similar to 2008 in due course as the Chinese hard landing, weakening US, rising supply, demand destruction and the passage of winter leave prices completely out of whack with reality.
$60 ahead for iron ore. Quite possibly lower.