Futures
November 14, 2013
Iron Ore and Scrap Futures
Written by John Packard
Iron Ore
Resilient is the word best used to describe this market with Iron Ore still $136.6/MT on the index. A third ISM number out of China above 50, this time for October, has some traders quite buoyed by the growth potential there. Growth out of China is as clear as mud as always, but for now it’s looking better and that’s all the traders really care about. Plenty of news around about China’s really really awful air quality, that just got a lot worse with winter approaching, and the efforts planned by the Chinese to shut down some old industrial capacity, i.e. old steel mills. Looks like they may be serious this time, and this could have an effect on demand for ore going forward as those effects are absorbed. We hear less imminent talk about prices dropping. Actually that is what’s needed if it is ever to happen. The market remains backwardated nonetheless. Let’s call Dec ’13 either side of $133.25/MT, Q1 ’14 either side of $130.35/MT, Q2 ’14 either side of $122.75/MT, Cal ’14 either side of $121.75/MT and Cal ’15 either side of $110.75/MT.
