Iron Ore’s New Year Party’s Just Getting Started
New York: Fortescue Metals Group has long been iron ore’s greatest cheerleader, and with metal prices near the highest level in two years it’s showing no sign of losing faith.
“You can see the confidence is back” among Chinese steel executives, David Liu, the miner’s director of sales and marketing, said on an analyst call Tuesday. “The cheers of ganbei are getting louder and louder.” Those tempted to discount this as the sort of bullish talk you’d expect from a sales director should take a look at how China’s steelmakers are doing from another angle: Blast furnaces in January were the second-most profitable they’ve been in at least seven years, according to
It’s natural that when prices are running as hot as they are, traders start looking for reasons for a pullback
It’s natural that when prices are running as hot as they are, traders start looking for reasons for a pullback. What about port inventories, which rose to a record-high 113.95 million metric tonnes in December? Well, that apparent glut disappears when you consider it in relation to consumption, which has been growing equally fast. China’s port inventories of iron ore don’t look very high in relation to consumption. Also not a big worry for steel, which isn’t much traded internationally is generally used as a prop for the domestic economy when external demand is looking weak. — Bloomberg