Iron Ore Snapshot: Seaborne Market Remains Tight
Commodities | Australia
? Having fallen by 10% since their February highs, seaborne spot iron ore
prices have stabilised in the low $170's/t range (basis 62% Fe).
? As ever, there are conflicting views regarding near-term price direction
but the balance of opinion suggests further downward pressure on prices
in the short term, courtesy of power-related constraints on Chinese steel
production, seasonal weakness in European demand, rising port stocks
in China, and improving export availability from Australia and Brazil.
? We take a more positive view - our 3Q-11 price forecast is $170/t CFR:
- We expect weaker Chinese steel production in 3Q but this is largely
seasonal/power-related rather than structural/cyclical weakness.
- Despite the strong start to the year for Chinese steel production, there is
little evidence of a stock build and rebar margins are holding up well.
- Iron ore port inventories are high in absolute terms but are not
excessive in relation to pig iron production.
- Export availability from India continues to disappoint and Australia/Brazil
have a lot of catching up to do following a weak first quarter.
- Most important of all, we think real underlying demand in China will
exceed current expectations which are overly influenced by policytightening
measures rather than real end-use demand.
? Any near-term price weakness could be a good opportunity to buy into a
structurally tight seaborne market that could bounce in 4Q-11.
- Forums
- ASX - By Stock
- PLV
- gsjbw iron ore price update
gsjbw iron ore price update
Featured News
Add PLV (ASX) to my watchlist
Currently unlisted public company.
The Watchlist
FHE
FRONTIER ENERGY LIMITED
Adam Kiley, CEO
Adam Kiley
CEO
SPONSORED BY The Market Online