Iron ore has negative factors now
This week sees risk for Iron ore losing more ground. The factors are stacking up in favour of a falling second half of the year for the commodity The factors that boosted Iron Ore for the first half of the year are now reducing. Here are some of the bearish factors indicated by Bloomberg’s market’s live blog:
1. China’s steel industry PMI has fallen back into contractionary territory.
2. The vessel -tracking data pointed to rising exports and;
3. China’s port holdings have now expanded for a third week
4. The Brazilian miner Vale is confident that despite he pandemic it can still bring a lot of Iron Ore to market in the second half of the year. Accroding to CFO Luciano Siani Pires this means that Iron Ore prices should fall.
5. Australia’s Port Headland, which is the main maritime gateway to the nation’s mighty Pilbara mining headland, is expected to release record levels for June flows.
So, the tightness in the Iron Ore market which was characteristic of the first half of the year looks like dissipating into the second half of 2020. Expect sellers on any retracements higher as long as this remains the case