Iron ore price

The big iron short squeeze continues today in the equity market but it’s a bit of fizzer versus the underlying price.

The Sauce may be a grab bag of disaffected student nut-jobs but they are much better at analysing iron ore dynamics than the MSM.

I have been stunned at the swiftness at which one tiny shift in BHP’s iron ore expansion plans has morphed into global media tub-thumping for a new iron ore bull market.

Some bright young spark at Bloomberg has declared that iron ore is in a new bull market: Iron ore advanced into a bull market after BHP Billiton curbed expansion plans and supplies from higher-cost mines dropped, easing concern global output will outpace demand and feed a global glut.

It had to be said, I guess, from the SMH: “None of us predicted it would be as bad as this,” Mrs Rinehart, chairman of Hancock Prospecting, said on Friday at a mining industry lunch in Sydney.

Here are the iron ore charts for April 24, 2015: Now that’s a melt-up.

The hysteria gripping the iron ore market is fun and a great opportunity to get set for the next down leg.

We’ve got ourselves a fair dinkum short squeeze going now in iron ore.

The AFR has a piece today on Aquila’s Tony Poli: Tony Poli must be the luckiest man in iron ore.

A little knowledge is a dangerous thing.

From the AFR: To get the latest deal away it not only had to offer a significantly higher coupon on the bonds it was forced to secure the debt against the company’s assets.

Here are the charts for April 23, 2015: Spot climbed again with Tianjin benchmark up 1.7% to $53.80.

Big iron shares are making sense today as neither RIO nor BHP has taken off post the overnight surge with the former up a lousy 1.5% and latter 2%.

From the AFR: Treasurer Joe Hockey, whose budget hopes are being smashed by falling iron ore prices, has backed a decision by Australia’s biggest miner to curb production of the key export.

From Morgan Stanley: MIIT targets to reduce 80mnt steel capacity and to limit steel companies to within 300 in the next three years: MIIT targets to reduce 80mnt steel capacity within three years and to limit the number of steel companies to within 300 from the current 500 during the same period.

From The Australian: The initial $1.5 billion senior secured notes offer from Fortescue Metals has ballooned to $US2.3 billion due to a high level of demand.

Yesterday I didn’t make much of the BHP announcement that it would delay some port work for one year which would also slow its rise from 275 million tonnes (mt) of output per year to 290mt.

The AFR back page gives Colin Barnett a lift today with a poorly reasoned rationale for Colin’s cartel: Canada started operating the Canadian Potash Exporters cartel marketing firm 43 years ago to manage the world price of potash, the mineral used in fertiliser.

Here are the iron ore charts for April 22, 2015: Don’t adjust your television set.

Standard and Poors has cut FMG debt deeper into junk: MELBOURNE (Standard & Poor’s) April 22, 2015–Standard & Poor’s Ratings Services said today that it had lowered its corporate credit rating on Fortescue Metals Group Ltd.

Big iron equity is struggling again today with RIO at its lowest since January down 1.5%, BHP is similar and below $30 and FMG is going nowhere.

From Morgan Stanley: Iron ore has seasonally weak 1Q: The 1Q report shows Iron ore sales of 73Mt annualising 17% below guidance, while Pilbara production of 71Mt was 14% below.

Here are the iron ore charts for April 21, 2015: Spot fell and so did paper though Dalian rallied back to 389 overnight.