Iron ore prices plummet on Chinese data

Tuesday, March 11, 2014

Iron ore prices plummeted below $105/tonne 62% Fe CFR Tianjin on the weaker Chinese trade balance, sparking fears that rising finished steel inventories and iron ore port stocks could lead to a prolonged depression in spot prices. The TSI index dropped 8.3% on Monday as manufacturing growth slows in the world’s second largest economy as prices have declined over 22% since the start of the year. Iron ore port stocks have steadily risen over the past few quarters, reaching a record 105m tonnes last week.

US stocks spent most of yesterday’s session under pressure as market participants mulled over the weaker Chinese export data, causing the S&P 500 to pullback from record levels. Industrial stocks were among the worst performers on Wall Street as both the S&P 500 and DJIA slipped between 0.5%-0.6% lower early on. However, market support managed to hold firm as investors continued to digest Friday’s better than expected nonfarm payroll figures, proving the resilience of developed markets as both indices closed marginally lower.

Asian equity indices rebounded during overnight trading as the BOJ maintained monetary easing measures as the impending sales tax increase in April could potentially lead to a sharp contraction in growth. The central bank pledged to increase the monetary base by 60-70 trillion yen per year. The supportive comments sent both the Nikkei and TOPIX higher, allowing them to recoup some of yesterday’s heavy losses, closing up 0.69% and 0.46% respectively. Markets gained further support from a weaker yen, which held above 103.20 against the dollar yesterday.

 JPY holds above 103.00 against the dollar

JPY Curncy Japanese Yen Spot 2014 03 11 07 58 53

Chinese iron ore port stocks continue to rise

SIVCTOTL Index Steelhome China 2014 03 11 08 07 49

TSI 62% Fe prices plummet on bearish Chinese trade data

TSIPIO62 Index China Import Iro 2014 03 11 08 01 48

Events for today

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UK

Feb

BRC Retail Sales

0700

DE

Jan

Trade Bal

0930

UK

Jan

Industrial Output

1400

UK

Feb

NIESR GDP Estimate

1400

US

Jan

Wholesale Inventories

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Topics: Equities, JPY, Iron Ore
More from: Kash Kamal