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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
IRON ORE
Iron ore is off an eye catching 7.0% today in terms of the SGX active futures contract. This is represents a fresh YTD low and follows last week's 14% fall, see the chart below. The contract is set to record declines for an eight consecutive session, last trading just above $112/tonne.
- As we noted in an AUD bullet at the end of last week, iron ore weakness is a little at odds with China's renewed focus on infrastructure investment.
- Onshore Chinese reports highlight rising steel inventory levels and a lack of demand as the catalyst for recent weakness. Property sector headwinds will also be a factor.
- Note onshore Chinese average rebar steel prices are also at YTD lows, after losing close to 5% last week.
- Iron ore inventories at China ports have been on a down trend since February of this year though.
- The spill over to commodity sensitive AUD FX has been fairly limited today. AUD/USD is sitting just above 0.6950, tracking tracking broader USD sentiment.
Fig 1: Iron Ore Falls To YTD Lows
Source: MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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