The Strategist

Iron ore market is facing bearish trend


08/06/2019 - 12:33



Iron ore prices, which jumped in the first half of the year after supply cuts, are falling amid escalation of the US-China trade conflict and rising supplies, Bloomberg reports.



pixabay
pixabay
On Monday, iron ore prices in the spot market fell to $ 99.50 per ton, which is more than 20% below the five-year peak reached last month.

Iron ore is falling in price amid a wider decline in metal prices as the trade war escalates.

The US Treasury Department named China a country that manipulates the national currency after the Chinese currency rate fell below 7 yuan per 1 dollar. The decision of the US Treasury can result in a full-fledged currency war.

In addition, expectations that the global supply of this product will increase contribute to lower iron ore prices.

Australia & New Zealand Banking Group Ltd. notes that signs of supply growth are troubling the market, citing Vale SA’s plan to return more capacities that were suspended after the dam broke.

On the Singapore Stock Exchange, the value of ore futures for delivery in September fell to $ 94.68 per ton. Closing below $ 95.34 per ton will mean a decrease of more than 20%, which corresponds to the general definition of a transition to a bear market.

Fortescue CEO Elizabeth Gaines told reporters at a forum in Kalgoorlie, Western Australia, that the company sees the potential for lower demand in China this half year compared to the first six months of 2019.

Morgan Stanley predicts that commodity prices will fall to $ 90 per ton in the fourth quarter.

source: bloomberg.com




More
< >

Wednesday, December 11th 2019 - 08:38 Study: Digitalization slows inflation down