Iron ore price, page-45835

FE on SMM

A few observations of note.

58% hasn’t grown a whole lot in last few days after doing well in the last few months despite the lockdown situation in China. The discount to 62% for 58% has expanded overnight from below 10% to almost 14%.

Overnight Steel prices fell by 5-6% again for both HRC & Rebar.
Steel Mills profits are still very unhealthy and need to improve for this rally in IO prices to sustain.

Interestingly the SMM report has not updated national IO stock pile levels since last week, at ~121mt with a declining trend line supportive of IO prices as the Chinese mills are using more IO than is being brought into the country.

At the moment sentiment for IO is buoyed by the dwindling stock levels, the broad stimulus, the reopening of Shanghai and promise that the economy will be supported to reached target GDP figures.

This rally could be threatened by weakening steel prices in China, the unprofitable steel mills in China or another lockdown.






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