Iron Ore Best Performing Commodity First Half of 2019, Cotton The Worse

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  • #21323
    TradersCom
    Keymaster

    Recent strength in precious metals and weather affected…

    [article]1621[/article]

    #21518
    TradersCom
    Keymaster

    Iron Ore From Best Performing To Bear Market.

    Spot benchmark ore has dropped to $99.50 a ton, representing a 20% drop from five-year highs above $126 last month.

    Iron ore prices are down sharply in China on the trade friction escalation and a further 2.3m tonne gain in port inventories over the past week,

    Port inventories have played a big role in covering for supply problems in iron ore over the year to date, and the recent rise points to improved supply and lower steel production expectations.

    Record breaking Chinese steel production and supply outages in Brazil and Australia helped lift the iron ore price by 65 per cent before the current pullback, generating a huge cash windfall for big producers like Anglo American, BHP, Rio Tinto and Vale.

    Vale was forced to mothball more than 90m tonnes of iron ore capacity earlier this year after a waste storage dam at one of its mines broke, killing more than 200 people.

    The Brazilian miner said on Thursday output had picked up and it was currently operating at a rate that would produce between 340m and 345m tonnes a year. That is higher than its sales guidance for 2019 of 307m to 332m tonnes.

    This slowdown is not just driven by summer production curbs in Tangshan, but also by weaker steel demand, as evidenced by the increase in China’s finished steel inventories.

    A bear market is called after a fall 20% or more from recent highs, The AUD/USD pair has also been hit, falling from 0.7082 to 0.6748 in 2.5-weeks to Aug. 5.

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