Final Thoughts
November 7, 2014
Final Thoughts
Written by John Packard
One thing that we learned from the earnings conference calls which were conducted over the past two weeks: the domestic steel mills will be entering 2015 with all of their blast furnaces online, maintenance completed and (hopefully) running well. Barring any unforeseen circumstances we should have plenty of domestic supply going into the traditionally strong first quarter. The question now will be will demand match up well with supply and how will the flood of imports that we have seen during the second half of 2014 impact the supply/demand fundamentals?
Iron ore prices continue to sag below $80/dmt (dry metric ton) in the spot markets in China. One year ago 62% Fe ore was selling on the spot market at $135.9/dmt (The Steel Index). At the beginning of the year ore was $135.0/dmt (1/2/2014). Ore broke through $100/dmt on May 19th when it traded at $98.5/dmt. Spot prices broke $90/dmt on June 16th when 62% Fe fines traded at $89.0/dmt. It took until September 22nd before ore broke through the $80 mark when it hit $79.8/dmt. Last Friday the spot price was $75.5/dmt and many are forecasting ore could hit $70/dmt.
