Iron ore prices pull back towards $100/tonne

Asian stocks got off to a shaky start to the week as Chinese equity indices led a widespread decline in the region. Weaker house price data released by the National Bureau of Statistics over the weekend fuelled concerns that the economic slowdown could accelerate pace. Existing residential apartment prices saw a decline in 22 out of the 70 cities surveyed in April, up from only 14 cities the previous month. Both the CSI 300 and Shanghai Composite opened sharply lower and spent the entire session in negative territory as the negative outlook saw short term profit taking.

Spot gold prices are struggling to stage a breakout despite building on support at the 100 day MA in early trading. Prices remain underpinned by the 200 day MA at $1,298/oz while support on the downside towards $1,293/oz seems to be holding up well. With a lack of economic data releases today trading could remain tightly rangebound as investors struggle with direction.

Iron ore prices dropped towards $100/tonne reaching its lowest level since September 2012 as investors remained pessimistic regarding the demand outlook from China. The TSI 62% Fe CFR Tianjin benchmark price fell back to $100.70/tonne on Friday bringing the decline in prices to almost 16% from April’s peak of $119.36. With finished steel prices under pressure and rising iron ore port stocks buyers may hold out for further declines, opting to hold enough iron ore to satisfy current production.

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Topics: Equities, Gold, Iron Ore
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