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Iron Ore


theflasherman

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The strong run in the iron ore price looks set to continue when the benchmark price is set tonight.

 

Chinese iron ore futures are up for a third straight day to hit their upward daily limit and are on track for a second weekly gain as mills in the world's top buyer stepped up buying.

 

Benchmark iron ore futures for September settlement on the Dalian Commodity Exchange surged 4 per cent to 417.5 yuan ($US67) before trading at 416.5 yuan.

 

"I think the market has been overly bearish earlier. Some Chinese steel mills need to pick up purchases of the raw material as their inventories are quite low," said Xia Junyan, an analyst with Everbright Futures in Shanghai.

 

Iron ore inventories at main Chinese ports dropped 600,000 tonnes on a week earlier to 93.61 million tonnes as of Friday, data from industry consultancy Umetal.com said.

 

However, some analysts doubt the rally will be sustainable as top miners are still expanding production and steel demand in China remains sluggish.

 

Some speculators who bet on falling iron ore prices might be forced to cover their short positions for the May contract, which jumped 3 per cent. And the rally helped lift the benchmark contract, analysts said.

 

Separately, the most-traded rebar futures on the Shanghai Futures Exchange hit a session high of 2,388 yuan, its highest since April 2, as some investors bet on improving demand.

 

"Steel mills are ramping up production by taking advantage of the previous slump in iron ore prices, but steel demand hasn't recovered much, which will pressure the market," said Xu Huimin, an analyst with Huatai Greatwall Futures in Shanghai.

 

Iron ore for immediate delivery to China's Tianjin port jumped 1.7 per cent to $53.80 a tonne on Thursday, its highest since March 27, according to The Steel Index.

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usd$ 53.80 on tianjin port, and usd54.82 on dalian port. what the heck....seems spot price still just acting as "price guide". though!! :o

 

 

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Here are the Dalian iron ore futures charts for today. I've included the price (most active contract/benchmark contract) and the total turn over, total volume and total open interest for the entire market (all contracts). As I said in my previous post I doubt this bounce will breach the 400 mark for very long. The 417.5 number quoted in the story below was the maximum price traded. Just another article to feed traders expectations of a correction which will never come. I've seen two other bounces like this fizzle out within a few days in the last 12 months. Lucky if this rally lasts a week.

 

Eshmun

 

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stupid traders bought BHP RIO FMG BCI MGX last few days that made good profit because they see this iron ore price will bounce off the lows

the smart traders shorted these stocks and lost arms and legs because they think people who profit from this price bounce are "dumb luck'.

what market cares?? FACTS!!

 

 

 

 

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At least least four Australian miners are cash-generative at current iron ore prices, thanks to a 23 per cent rise in the bulk commodity price over the past three weeks.

 

Another 5 per cent rally in the iron ore price late on Friday night capped a rare good week for the local industry, and pushed the benchmark price to $US57.81.

 

While BHP Billiton and Rio Tinto have easily remained profitable during the recent slump in iron ore prices, it is likely that few other local iron ore exporters were generating cash when the price hit $US47.08 on April 2.

 

But a weekly gain of 13 per cent means the iron ore price is now at six-week highs, and is believed to be above the "break-even" price for the world's fourth biggest producer, Fortescue Metals Group.

 

The estimation of break-even prices is fraught given the constantly changing factors involved, but Fortescue is believed to need iron ore prices to be about $US50 per tonne to cover its cost of production, royalties, maintenance spending and its debt obligations.

 

The junior miner that relies on Fortescue to rail, ship and market its product to customers, BC Iron, is also likely to be profitable at the recently improved iron ore price.

 

According to BC's improved performance during the month of March, UBS believes the miner can be generating cash so long as the benchmark iron ore price is $US55 per tonne or higher.

 

Those close to break-even around these prices are believed to include Mt Gibson Iron, whose cost position has ironically improved since a wall failure at its Koolan Island mine, and US miner Cliffs Natural Resources, whose Koolyanobbing operation exports through the South Coast of WA.

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iron ore up 5.5% to $US57.81 per dry metric ton on Friday

LME copper up 1.5% at $US6030 a tonne on Friday

LME nickel up 3.9% to $US13,195 a tonne on Friday

Spot gold down $US14.97, or 1.3% to $US1179.00 an ounce on Friday

Brent crude up 43 US cents, or 0.7% to $US65.28 a barrel on Friday

What's on today:

 

Germany import prices

US flash services PMI

 

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More fuel for the miner rally: Chinese iron ore futures are up for a fourth straight session to hit a one-month high as steel mills in the world's top consumer picked up buying of the raw material.

 

The benchmark September contract on the Dalian Commodity Exchange marked a session-high of 436.5 yuan ($US70) a tonne, its strongest since March 26. It's currently trading 4.2 per cent higher at 430 yuan.

 

Chinese steel mills have stepped up restocking since last week as they raise steel production, lured by improving margins after steep losses in iron ore, industry sources said.

 

Spot iron ore prices have risen 23 per cent since April 2, when they tumbled to $US46.7 a tonne, their lowest since the Steel Index (TSI) began compiling prices in late 2008.

 

Iron ore for immediate delivery to China's Qingdao port jumped 5.5 per cent to $US57.81 a tonne on Friday, its highest since mid-March.

 

"Demand from mills is improving, while inventories at the main ports are falling as new cargoes haven't arrived yet, creating a time-gap for the rally in iron ore," said Hu Xiaodong, an analyst with Nanhua Futures in Hangzhou.

 

However, some traders remained concerned the rally would be unsustainable due to the oversupply in iron ore and sluggish steel demand hit by a property downturn.

 

"The strong gains in iron ore prices are likely to reduce mills' margins and force them to slow down production, weakening appetite for iron ore," said an iron ore trader in Beijing.

 

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i might sold our iron ore stock little too early, but i do think that over supply issue will stay with us for a while.

i'm step aside to see what happen this week?? :unsure:

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At least least four Australian miners are cash-generative at current iron ore prices, thanks to a 23 per cent rise in the bulk commodity price over the past three weeks.

 

Another 5 per cent rally in the iron ore price late on Friday night capped a rare good week for the local industry, and pushed the benchmark price to $US57.81.

 

While BHP Billiton and Rio Tinto have easily remained profitable during the recent slump in iron ore prices, it is likely that few other local iron ore exporters were generating cash when the price hit $US47.08 on April 2.

 

But a weekly gain of 13 per cent means the iron ore price is now at six-week highs, and is believed to be above the "break-even" price for the world's fourth biggest producer, Fortescue Metals Group.

 

The estimation of break-even prices is fraught given the constantly changing factors involved, but Fortescue is believed to need iron ore prices to be about $US50 per tonne to cover its cost of production, royalties, maintenance spending and its debt obligations.

 

Quite remarkable turnaround in the much commented on commodity ---Iron Ore---and the derided iron ore producer FMG, just wondering if the legion of pessimists have got this all wrong, particularly in calling for the early demise of FMG.

 

Ore and FMG weekly charts enclosed.

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took some shorts for FMG at 2.46 this morning, think it will go back to $2.00 mark as iron ore supply issue hasn't solved

somewhere at usd$60.00/t might cap this rebound imho.

 

eb--am not talking intraday but rather looking at the Big Picture for both iron ore, and their ASX quoted suppliers, people may be very surprised if the whole commodity section stages a turnaround as the USD weakens.

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not sure what you are meaning of "turn around"??

to me if stuff been over produced and dumped on the market then there will be supply/demand imbalance

that is the case for iron ore for rest of this year at least.

day trade or short term trade{my case} will based on this plus some other stuff. i don't see any "turn around" for FMG any time soon if you are looking at history of FMG share price.

so it won't be long term buy for me.

you seems very keen on FMG, all i can say is good luck with it!!

 

 

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