Tuesday , August 9 2022

Iron ore is free fall


  • Iron ore prices collapsed on Monday.
  • The benchmark price was the biggest decline in 189 months. For lower and higher scores, the fall was the biggest on record.
  • Reports of steel mills standing on the existing inventory, partly because of a profit margin collapse, were cited as a catalyst behind the move.
  • After hitting the downside restrictions and staying there during Monday's trading session, Chinese contract prices continue to fall overnight trade. Steel and coal futures leaped.

Prices for iron ore collapsed, entering the biggest decline on Monday.

And in the case of lower and higher grades, the biggest step on record.

The Canadian price of 62% fines fell 8.4% to $ 64.25 per ton, the biggest one-day decline since April 12, according to Metal Bulletin.

The index has now fallen in five consecutive sessions, down 15.6 percent from its death in the process, leaving it at the lowest level since July 17.

Like the benchmark, even lower grade ore was crushed, recording the biggest declines in the spot pricing era.

The price of 58% fines fell 9.1% to $ 39.72 tons, leaving it at the lowest level since September 24. Now he fell

The price of 65% Brazilian fines also decreased by 8.9% to $ 81 tons, a level not seen since April 9.

It was an ugly move, driven by reports that Chinese steel mills were unloading existing inventory given an increasingly pessimistic outlook for Chinese steel demand.

"[There are] Report that Chinese steel producers dismantled inventory, "he said, referring recently to stock markets and futures contracts on Friday.

"Prices are falling as steel margins are falling dent expectations of Chinese steel production."

Which help explain the elimination of existing inventories, profit margins in Chinese steel mills have collapsed over the past month, questioning the outlook for steel production and, consequently, iron ore demand.

"Chinese steel margins have fallen sharply in recent weeks, mainly because of lower steel prices," Dar says.

"[This is] In sharp contrast to the profits made by the segment over the past 18 months.

"Low margins will prevent steel mills from producing."

The commodity's contribution to iron ore markets On Monday, Chinese steel wires were also introduced, expanding the slide from the last cyclical peaks to more than 20%, leaving them in a technical bear market.

Shanghai futures contracts fell to 3,553 yuan, well below Friday's rate of 3,627 yuan. The January 2019 contract fell briefly to 3,496 yuan, its lowest level since June 26, and fell 21 percent from a seven-year high of 4,418 yuan hit in August.

Futures futures also rolled in on Monday, sliding to 3,392 yuan, from 3,465 yuan on Friday night.

The weakness in futures on steel flowed up to commodity goods in large quantities traded separately in Dalian, mainly iron ore.

After ending Friday's meeting at 487 yuan, the iron ore contract for January 2019 immediately dropped to 477.5 yuan remains there, leaving it down 6% from Friday's close meeting.

Without market rules that prevented the contract from over 6% in one meeting, losses would have been greater. Fluctuations given in future markets are often greater than those in spot markets, and the losses in spot markets were large on the day, one future suspect could easily fall more than 10% without rules to prevent larger losses.

Such as iron ore, cocaine and Coca-Cola futures, were also devalued at 1,297 and 2,115 yuan respectively, compared with 1,321.5 and 2,170 on Friday night. These closing levels were down 4% and 5.2% respectively from Friday's trading session.

After falling in recent meetings, there was some rare respite for futures in overnight trade on Monday. Except for Dalian iron ore.

SHFE hot rolled coil ¥ 3,459, 1.08%
SHFE Rebar ¥ 3,649, 1.76%
DCE Iron Ore ¥ 473.50, -2.07%
DCE Coking Coal ¥ 1,319.00, 1.07%
DCE Coke ¥ 2,146.00, 0.42%

Iron ore prices continued to slide despite steel rebound, cocaine and coke coal contracts during the meeting.

While suggesting that the iron ore points markets could weaken again on Tuesday, the broader rebound across the steel complex suggests that any weakness, if any, will be limited in volume.

Futures trading on Chinese commodities will resume at midday.

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