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IRON ORE: Eyeing Mid Nov Lows, Diverging From Resilient Copper Back Drop

IRON ORE
Metals bulletBulletCommodities

The active SGX iron ore contract is back close to mid Nov lows. We were last near $96/ton, having mostly tracked lower since the start of the year. Mid Nov lows were around $95.50 for the active contract. A break sub these levels could see Sep lows near $90/ton targeted from a technical standpoint. 

  • The softness in iron ore is in line with weakness in China property stocks, with the CSI 300 property sub index back to late Sep lows. Growth concerns continue in China despite recent services PMI beats.
  • Iron ore inventories at China ports did tick down at the end of last week, back to levels last seen in May. Still seasonality around inventory levels is that typically stay elevated through the course of the first quarter of the year.
  • Onshore steel price futures also remain entrenched in downtrends. Rebar is back to Sep levels from last year.
  • Copper is showing better early 2025 trends compared to iron ore, which has seen some modest divergence open up between the two series, but it isn't large by historical standards. 
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The active SGX iron ore contract is back close to mid Nov lows. We were last near $96/ton, having mostly tracked lower since the start of the year. Mid Nov lows were around $95.50 for the active contract. A break sub these levels could see Sep lows near $90/ton targeted from a technical standpoint. 

  • The softness in iron ore is in line with weakness in China property stocks, with the CSI 300 property sub index back to late Sep lows. Growth concerns continue in China despite recent services PMI beats.
  • Iron ore inventories at China ports did tick down at the end of last week, back to levels last seen in May. Still seasonality around inventory levels is that typically stay elevated through the course of the first quarter of the year.
  • Onshore steel price futures also remain entrenched in downtrends. Rebar is back to Sep levels from last year.
  • Copper is showing better early 2025 trends compared to iron ore, which has seen some modest divergence open up between the two series, but it isn't large by historical standards.