by Chris Becker
This is not looking good for the iron ore complex – everything falling off in a nice predictable, lemming like pattern:
The falls are being pushed by collateral covering – from Reuters:
Tighter liquidity in the steel sector has also weakened iron ore buying interest by steelmakers and traders, forcing some to sell their stockpiles at a loss to raise cash.
“Prices of port inventories have kept falling and some traders have had to sell cargoes at a loss to obtain cash, putting pressure on the market,” said an iron ore trader in Beijing.
“We have stopped importing cargoes for a while since as long as we buy, we will just end up making losses as prices keep falling,” said a second iron ore trader in northern China.
Following the falls overnight on worldwide stocks, today is not looking good for the iron ore miners on the ASX. Fortescue (FMG) was down nearly 5% yesterday, following the Morgan Stanley double downgrade as the spot price starts to squeeze its tenuous margins:
