Seeking Alpha

Iron ore plunge hits Brazil

  • The 8.3% dive in the price of iron ore to $104.70 per ton is the 2nd largest one-day decline on record, and came following weekend data showing an 18.1% Y/Y slump in Chinese exports in February (a gain of 7.5% was expected). While miners like BHP and RIO remain optimistic about supply/demand dynamics (though dour on price prospects), Goldman - picking one analyst team - sees the market moving into surplus in H2 and prices falling below $100 per ton.
  • The Shanghai Composite fell 2.9% overnight and Brazil's Bovespa is down 2% in the early-going. Australia (EWAdeclined 0.9% and the aussie (FXA) is off 0.6% to $0.9017.
  • The steelmaking ingredient is off 22% YTD and at its lowest price since October 2012.
  • In the meantime, the rumors are flying, including speculation a mill in China's Shanxi province defaulted on Friday and shut five to six furnaces. There's also chatter about banks looking to call in 20% of loans to private steel companies.
  • EWZ -2.1%, VALE -2.8%.
  • Brazil ETFs: EWZ, BRF, BRXX, EWZS, BRAQ, BRAZ, BZQ, BRZU, BRAF, UBR, BRZS, DBBR, FBZ
  • Base metal mining ETFs: XME, JUNR, PICK
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Comments (1)
  • davidshelton
    , contributor
    Comments (322) | Send Message
     
    China funk coming home to roost? Is China going to be the 3rd spoke in the global wheel to have a crisis? (after US and EU had theirs?)
    10 Mar 2014, 04:30 PM Reply Like
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