Steel Products Prices North America
March 11, 2014
Iron Ore Prices (China) Collapsed on Monday
Written by John Packard
Steel Market Update (SMU) has been writing about the building of the iron ore bubble in China for some time now. Our iron ore trading contact in Asia has been warning us of the massive inventories being built and now the crackdown by the Chinese government and banks on bad loans to both public and privately owned steel mills which is causing the bubble to begin to deflate.
On Friday we received the following information from our Asian iron ore and steel contact, “The Banks announced this afternoon they are going to intervene on Iron Ore at the Ports now. Buyers/Mills are requesting extensions on the payments and since the Buyer’s have to provide 20-30% Deposit when Opening the LC and against Negotiation of the Documents, the Banks are now advising they will confiscate the 20-30% and auction the Iron Ore at the ports to recover the 70-80% as they are refusing any extensions….”
