{"id":480,"date":"2018-12-13T14:28:42","date_gmt":"2018-12-13T14:28:42","guid":{"rendered":"http:\/\/commodity-trading.campus.local\/commodity-trading\/?p=480"},"modified":"2018-12-14T08:09:40","modified_gmt":"2018-12-14T08:09:40","slug":"iron-ore-bulletin-n4","status":"publish","type":"post","link":"https:\/\/campus.hesge.ch\/commodity-trading\/iron-ore-bulletin-n4\/","title":{"rendered":"– Iron Ore – Bulletin n4"},"content":{"rendered":"\n

Price Movement<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

As we can remark on this graph, after the\nprevious falling price to 62,99 USD per Metric tonne on the 27th<\/sup> of\nNovember, we see an upward trend earlier this month. However, the slight drop\non the start of this week indicates a current price at 66,82 USD \/metric tonne\nespecially due to the weakness in Chinese steel Futures Contracts. <\/p>\n\n\n\n

Small decreases are present for the Lower and\nHiger grades of Iron Ore. The price of the iron ore fines 58% is fix at\n42 USD\/Mt and the 65% fines at 82,80 USD\/Mt. <\/p>\n\n\n\n

Supply and demand<\/p>\n\n\n\n

Chinese steel production is still slowing due\nto the trade war with the US and also because China took measures to reduce air\npollution. For instance, the city of Tangshan \u2013 China\u2019s top steel production\nhub \u2013 announced on the December 8th, second-levels smog alerts which has led to\nan even more severe decline in steel production.<\/p>\n\n\n\n

Therefore, 86.25million tonnes of iron ore\nwas imported in December, down 2.4% from October and 8.8% from the same month a\nyear earlier.<\/p>\n\n\n\n

So far this year, China has imported 977.89\nmillion tonnes of iron ore, down slightly from 991.26 million tonnes in the\nsame period the previous year, according to calculations from Reuters (global\nnews agency in London).<\/p>\n\n\n\n

As a consequence, steel mills in the\nsmog-prone city have to shut their sintering capacity by 30-60% or even shut\ndown based on their emission level.<\/p>\n\n\n\n

Deep future curve<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

The reason is the weakness in Chinese steel\nfutures contract leading a decrease in futures contract number of iron ore.<\/p>\n\n\n\n

Moreover, it is predicted that the iron ore\nsupply will increase thanks to new investment in Brazil for the iron ore\nexploitation and cost decreasing by 5 %.<\/p>\n\n\n\n

The Singapore Exchange (SGX) launched on the\n3rd December the world\u2019s first high-grade iron ore derivatives in order to\nanswer the Chinese demand and to be in line with the new context of China\u2019s\nenvironmental policy. Indeed, the new swaps and futures reference the 65% Fe\nBrazilian fines index, CFR Qingdao to manage high-grade segment exposure, with\ngrade differentials in iron ore more volatile amid strong mills\u2019 margins and\nthe Chinese government\u2019s targets to reduce emissions.<\/p>\n\n\n\n

For instance, the top larger iron ore\nproducers Vale is negotiating changes in its iron ore pellet contracts for 2019\nfrom its current 62% Fe to the 65% Fe. <\/p>\n\n\n\n

Recommendation<\/p>\n\n\n\n

We should go long, we are expecting to see\nthe price decline due to the rise of iron ore production.<\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Price Movement As we can remark on this graph, after the previous falling price to 62,99 USD per Metric tonne on the 27th of November, we see an upward trend earlier this month. However, the slight drop on the start of this week indicates a current price at 66,82 USD \/metric tonne especially due to … <\/p>\n

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