The ferrous market reversed down sharply on October 11, 2022:
Yesterday’s tactical bits and pieces were swamped by shutdowns blue skies:
The iron ore price is down as steel mills in China’s top producing province of Hebei have been ordered to limit output, in a bid to ensure blue skies for the once-every-five-year Communist Party Congress that starts in Beijing later this month.
Cuts of 30% to 50% will be applied to the sintering process, where iron ore is readied for the blast furnace to be forged into steel, outlets including Coke Union Information and Calian reported.
The restrictions will apply from October 14 to 22. Hebei, which neighbors Beijing, has made headway in reducing capacity in recent years but still accounts for about a fifth of national production.
As well, Golden Week property sales were terrible and the outlook for starts equally so again:
There is some credit flowing through for project completions but this is not a game changer so long as sales are so weak. Total uncompleted volumes are the equivalent of about two months of starts and many of these will already be built.
Still bearish.
