Find below the iron ore price charts for February 11, 2014:
Rebar futures plumbed new lows as well.
There is no panic in the markets but all are sitting on, or have breached, key technical supports.
Updated port stocks have gone parabolic, rapidly approaching all time highs:
As I’ve said before, it is unwise to correlate port stocks directly with supply but they are broadly representative of the fullness or otherwise of the Chinese iron ore pipeline ie it’s filled to bursting. I don’t yet have the update on steel mill inventories to gauge how strong any destocking is at present but unless demand materialises soon a price cliff looms.
Meanwhile India is grinding towards more mining. From Reuters:
Goa expects to resume mining before monsoon that starts in June, its chief minister said on Monday, but this may not mean an immediate resumption in shipments from what used to be the country’s top iron ore exporter.
A ban on mining and exports in September 2012 to clamp down on illegal mining in Goa, coupled with a similar step in neighbouring Karnataka, has slashed output and shipments from India.
…”Complete ban for a very long period can be very dangerous, very economically damaging. Our reputation as a supplier is at stake,” Manohar Parrikar told business leaders at a conference, adding mining will “probably start some time this season”.
Goa’s mining season runs from October to May as monsoon rains allow no activity from June to September. The state’s mines director said in November he did not expect a resumption in mining before October this year.
And Delhi has denied requests for a ban on exports:
The Centre has rejected a suggestion to completely ban the export of iron and manganese ores . The proposal was given by Justice M.B. Shah Commission of Inquiry set up to look into the irregularities in mining between 2008 and 2011.
The report tabled in Parliament said the country had lost minerals worth over Rs 59,000 crore because of illegal mining in Odisha during 2008-11.
It recommended either a ban on iron ore exports or capping the production at 50 million tonnes (mt) per annum against the current level of150mt per annum to ensure conservation.
The Centre, in its reply on the action-taken report that was tabled in the Rajya Sabha, said it was not in favour of a blanket ban though it had the national interest in mind.
I expect Indian exports to resume slowly this year.
