Here’s the chart. Shanghai rebar is off the cliff. Iron ore is next.
And the scuttlebutt:
The decline is partially because the macro sentiment was affected after finding that the usage of the latestbond issuance is not directly related to the ferrous market, analysts at Shengda Futures said in a note.
Both iron ore and steel recorded gains on Monday after sentiment was boosted by China’s finance ministry unveiling plans to issue 1 trillion yuan of long-term special government bonds.
The anticipation of seasonally lower demand is also weighing on the prices of the key steemaking ingredient.
“Hot metal output may likely hit a ceiling in the coming one to two weeks, deterring traders’ interest in stockpiling (iron ore) … the high portside ore stocks remained a drag,” analysts at Galaxy Futures said in a note.
Meanwhile, U.S. President Joe Biden on Tuesday unveiled steep tariff increases on an array of Chinese imports, with tariffs on certain steel and aluminiumproducts more than tripled to 25% in 2024.
That sums it up perfectly. The next two months will not be kind to iron ore.
