voda schreef op 3 augustus 2017 17:27:
For the believers. :-)
Iron ore jump a short-term treat
The Sydney Morning Herald reported that iron ore experts are divided over the direction of Australia's largest export, with Chinese analysts convinced the bulk commodity is set to enter a bull market while local analysts say this week's surge is only a short-term burst.
The spot price of iron ore surged 7.2%, or USD 4.97, to near USD 74 a tonne during Tuesday's session as Chinese authorities inspected local low-grade steel mills, and surprisingly strong construction figures released last week caused the iron ore price to play catch-up to higher steel prices.
Mr Qiu Yuecheng an analyst at steel trading platform XiBen New Line said that "All of this sends a strong signal to the market the government will try and remove smaller mills and encourage the development of bigger mills, which is good for iron ore.”
He added that "Steel mills are making so much money so they are happy to pay a higher price for high-grade iron ore."
Local Chinese futures traders reacted dramatically to the prospect of tighter steel supply on Tuesday, following Chinese Premier Li Keqiang's reiteration over the weekend that low-quality producers will be shut down.
Mr Glyn Lawcock managing director of resources research at UBS said that "Can prices surge higher from here? Of course they can. But we don't see this as a sustainable move higher in the longer term. It's important to remain cognisant that the futures markets in China are heavily influenced by retail volume, and they respond quite rapidly and strongly in both directions to newsflow."
About 70 per cent of the Dalian market is made up of retail investors and, thanks to the proliferation of smart phones, there is a frenzy of individual investors trading everything from iron ore future to cotton and eggs.
But there is optimism that the Chinese economy is performing better than previously thought. Government spending on infrastructure and widespread property investment, despite a regulatory clampdown, saw China's PMI sub-index construction gauge jump to 62.5 from 61.4 in June.
As such, Goldman Sachs last week lifted its three-month iron ore forecast to USD 70 a tonne from USD 55, and the year-end target by USD 5 to USD 60.
Source : The Sydney Morning Herald