It’s over for iron ore. Shanghai steel futures are in free fall, well below seven-year support:
Dalian is also breaking down:
Coking coal:
Scuttlebutt is terrible:
Pessimism pervaded the Chinese iron ore market last week, with steelmakers and traders rushing to sell off rebar stocks ahead of the implementation of new rebar standards, consultancy Mysteel said.
More than 27,000 people in China were evacuated and hundreds of factories were ordered to suspend production as Typhoon Gaemi brought heavy rains, state media reported on Saturday.
Steel inventories at major Chinese steel mills rose for a second consecutive week in mid-July, increasing 5.8% from early July and 4% from a year earlier, data from the China Iron and Steel Association (CISA) showed.
We await the Poliburo meeting this week for one last hope yawnulus. Good luck.
Meanwhile, another gloomy portent:
An “undisclosed” vendor was offloading $1.9bn worth of shares in the Andrew Forrest-backed Fortescue Metals on Monday night in a trade handled by JPMorgan, extending the sell off in the company since it stepped back from its green energy strategy.
The Australian understands the block was put on the market by an institutional investor offloading its position, with fingers pointing to The Capital Group after JPMorgan last month worked on a $1.1bn sell down for the group with that deal priced at a six per cent discount to Fortescue’s last closing price.
The understanding is that the price was being described as “a clean up trade” for the seller.
Shares on Monday night were being offered at a price range of between $18.55 to $19.10 per share – well below Fortescue’s Monday closing price, with bids being accepted in 5c increments. The book at the bottom of the range was covered on Monday night.
The price equates to a discount of between 8.8 per cent and 6.1 per cent to the last traded share price of $20.35.
It was Capital Group that sagely bought in at the bottom in 2016.
Its exit is all you need to know.
