Steel (Iron Ore) 02 (Nov 11 - Apr 17)

[winston]

China Iron Ore Supply May Pose 'Acute' Risk to Prices

Axiom’s Gordon Johnson takes a look at China’s iron ore appetite Tuesday, writing that with just a few days to go in 2016, he estimates that imports to China are up 78 metric tons this year, while iron ore consumption is only up 10 metric tons (with domestic supply flat).

Source: Barrons.com

http://blogs.barrons.com/emergingmarket ... yptr=yahoo

[winston]

China will produce more steel in 2017, but they’ll also use most of it themselves

by Huileng Tan

According to a recent report by BMI Research, China will produce 825 million metric tons of crude steel next year, a 0.5 percentage point increase from 2016—yet will consume 87 percent of this production.

This year output increased at a monthly average of 3.6 percent on-year from August to October, amid monthly average export declines of 17.5 percent from a year ago.

Chinese steel inventories as a proportion of production were also at a historic low of 8.2 percent in November.

The domestic demand will narrow the global steel market surplus to 3.2 million tons in 2017 from 10.9 million tons in 2016, BMI forecast.

China is both the world's largest steel producer and consumer.

Steel prices are already rallying this year on the improved outlook, with prices in China gaining 60 percent.

Prices of its raw material iron ore have doubled on the back ofexpectations from Trump's massive infrastructure stimulus plan, and as China continued to tackle over-capacity through production cuts, as well as leaving inefficient factories to idle.

The bank said it is confident China can achieve its 150 million metric ton permanent capacity cut target by 2020, citing cuts of 68 million tons by November, exceeding this year's target of 45 million tons.

Morgan Stanley said steel stocks in China, Japan, India and Brazil have 20 to 40 percent more upside, alongside those in the U.S. Top picks include Angang H & A and Maanshan H in China; US Steel, AK Steel and Steel Dynamics in the US; and ArcelorMittalSA and SSAB in Europe.

Source: CNBC.com

http://www.cnbc.com/2016/12/30/china-wi ... CD6,GEPR,1

[winston]

Australia predicts dramatic fall in iron ore prices

Shares in Australian mining companies have fallen after the government forecasted a dramatic decline in iron ore prices.

The government forecast an iron ore price of $46.70 a tonne by 2018, almost half the current level of $80.

The current price is supported by resurgent demand from China.

But the Department of Industry, Innovation and Science said that demand was unlikely to continue over the coming years.

The department also lowered its forecast for iron ore exports by 2% to 832.2 million tonnes for the fiscal year 2016-17.

Australia is the world's biggest supplier of iron ore and shares in the country's main mining companies fell after the report was released.

Hardest hit was Fortescue Metals which fell more than 3% in early trade, while commodity giants BHP Billiton and Rio Tinto also saw their shares prices drop.

In its forecast early last year, the department had predicted an iron ore price of $44.10 per tonne, but an increase in Chinese demand spurred the price to above $80.

Source: AFP

[winston]

not vested

3 Steel Stocks That Will Give Back All of the Trump Rally

Steel stocks have been the revelation of 2016, but gravity won't be denied

By Josh Enomoto

Source: Investor Place

http://investorplace.com/2017/01/3-stee ... IGBUPl96M8

[winston]

The construction industry is the largest consumer of iron and steel, accounting for about 50 percent of world production.

In 2015, the U.S. produced about 26 million metric tons of pig iron and 81 million metric tons of raw steel.

China produced 710 million metric tons and 822 metric tons, respectively.

Source: Bloomberg

[winston]

Can Iron Ore Rally Continue?

By Shuli Ren

China’s latest import data boosted the street view that Chinese steel companies were starting to use high-quality imported ores.

China’s ore mines largely produce low iron-content ores and the government’s supply-side reform has forced many of these factory to shut down.

As a result, higher demand for imported ores from domestic steel mills have created the surge in iron ore prices since late last year, analysts argue.

Chinese ore mines are not shutting down fast enough.

When looking at days of iron ore inventory at China’s domestic mills, as well as iron ore inventories at China’s ports, we note that at no time in history have both of these inventory indicators been as high as they are today.

In other words, he thinks investors that bought so late into this rally will end in tears.

Source: Barron's Asia

http://blogs.barrons.com/asiastocks/201 ... -continue/

[winston]

Iron Ore Price Hits Record High In China: How Bears Got It So Wrong

By Shuli Ren

The iron ore market is still oversupplied.

Chinese traders have been stocking up their inventories (see chart) to bet on the rising iron ore price.

The build-up of inventories is creating the appearance of an iron ore shortage.

Source: Barron's Asia

http://blogs.barrons.com/asiastocks/201 ... -so-wrong/

[winston]

Chart of the day: Awesome iron ore

Price action in Dalian iron ore futures this year has been powerful and technically very interesting.

Since December’s break above very long-term resistance at about 570 yuan (US$82.85) per tonne, it has been thrashing around in big weekly and monthly ranges, confirming the tussle between bulls and bears that has been playing out.

Positive momentum appears to have won, rallying this week to its highest level in almost three years.

Support was provided by what had been resistance at the 26-week moving average and 38 per cent Fibonacci retracement.

This now provides a springboard for further gains with our original target at 840 yuan still favoured, and an extension to 985 yuan is a possibility if enough upside pressure builds.

Source: SCMP

http://www.scmp.com/business/commoditie ... e-iron-ore

[winston]

What’s Been Driving The Iron Ore Rally And Why It Should Ease

By Shuli Ren

Iron ore prices have already spiked 17% this year as China shuts steel production.

Source: Barron's Asia

http://blogs.barrons.com/asiastocks/201 ... ould-ease/

[winston]

Chart of the day: Steel still stellar

by Nicole Elliott

Having comfortably met our first target at 3,500 yuan (US$509.50) per tonne, Shanghai steel rebar futures barely paused for breath even though that was a 50 per cent retracement of the massive drop in prices from 2011 to the low in December 2015.

The 50- and 200-day moving averages remain supportive, the shorter one especially propping up prices.

Two consecutive weekly closes above 3,500 yuan have not increased bullish momentum and the contract is overbought on the relative strength index.

Nevertheless, we shall allow for a rally to our second target at the psychological 4,000-yuan area before a proper bout of consolidation sets in.

It is worth noting that Dalian iron ore futures are also well bid at the moment.

Source: SCMP

http://www.scmp.com/business/markets/ar ... ll-stellar