Daily iron ore price update (limit down again)

The ferrous complex was smashed again on February 15, 2022:

Bloomie has more:

On Tuesday, some Chinese iron ore trading firms were summoned to a meeting with a trio of powerful government departments — including the markets regulator, the economic planning agency, and the securities regulator — to discuss “abnormal” prices. The companies were warned against hoarding and speculation, according to an official statement.

And an editorial in the English-language China Daily urged stronger steps to stabilize prices as the government boosts cyclical demand including infrastructure spending. The paper blamed “domestic and foreign capital” for fueling speculative price gains.

Futures on the Singapore Exchange were down 8.8% at $134.05 a ton by 4:16 p.m. local time. On China’s Dalian Commodity Exchange, prices closed down 10% at their daily limit.

Like BHP, some analysts also question whether efforts to rein in prices can have lasting impact if the physical market tightens further.

“History has taught us that these sharp plunges after Chinese rhetoric on investigating and supervising iron ore prices are short and temporary,” said Atilla Widnell, managing director at Navigate Commodities. A fall in supplies from Australia and Brazil — together with rising steel production — have created a very finely balanced market, he said.

Actually, history tells us that Chinese invention usually marks the topping process of speculative cycles, as it did last year.

In another month, we will be out of the seasonal supply weakness period and demand is still going to sorely disappoint with Chinese property buggered.

With the price still so high and China pulling its revolver, the risks are all tilted downwards through April.

Houses and Holes

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