Find below the iron ore price table for October 17, 2013:
Spot looks stuck. Swaps are threatening to break out and rebar is rolling over. Futures fell to a new low yesterday.
None of which has gotten in the way of an iron ore equities surge, especially FMG:
This has been charged by a number of factors. The backdrop of a stickily high ore price and the failure of a seasonal drop to present itself have given way this week to very strong Chinese import data and Rio’s powerhouse Q3 production report, more of which is now priced for FMG. That is a perfect storm of good news!
Could it run further? Sure, especially if markets expect ore to rise into a year end restock by Chinese mills.
A word of warning. I still expect seasonal weakening. It looks like rebar is still signalling weak steel fundamentals. And I do not expect a huge year need jump because inventories are not running down much. But markets are looking past that for now.
I still say FMG will face trouble next year!