io is up $1.11, fall in the price is temporary, page-30

http://www.macrobusiness.com.au/2014/03/daily-iron-ore-price-update-reprieve/

The capesize component of the Baltic Dry surged again yesterday by 4.5%, those are the kinds of jumps we can associate with restocking though the aggregate level is not yet at levels indicating such.

From Reuters today, Mac Bank’s Greame Train sounds bearish:

“We had this big selloff and it seems to have stabilised a bit since, but there is no real appetite for the mills to replenish inventories and demand is still pretty appalling. Everyone is in a holding pattern and no one is taking any risks,” said Graeme Train, an analyst with Macquarie in Shanghai.

…”Now with the port stockpiles so high and exceeding 100 million tonnes, there isn’t much of a spot market left,” said a trader based in Tangshan in Hebei province.

“In these circumstances, you can’t analyse actual market demand by looking at the import figures. People aren’t making money from spot market transactions but from getting letters of credit, selling the cargo as soon as it has arrived at port and then using the funds for some other purpose,” he said.

But Train of Macquarie said iron ore financing was unlikely to have been the decisive factor behind the increase in import volumes.

“I wouldn’t deny it is happening at all, but I don’t believe it is happening on that sort of scale. There are a few specialists making the odd deal on the side but I don’t think it is widespread.”

“We have seen 100-million tonne stockpiles before when demand and imports were much lower, and they are coming back to that level now with a much higher run rate of imports,” he said.

Fair enough but we haven’t see this kind of context before, either, with a new regime seemingly determined to force a shakeout.

Nonetheless, I’m going to go edge out on a limb this morning and say the worst is over, for now, unless we see a sudden further deterioration in economic conditions. Rebar average looks to have bottomed and the BDI has firmed. A modest restocking appears in train (if you’ll pardon the pun).