Why can raw materials prices be reviving once again?

After hitting $60/tonne CFR for the MBIOI62 in April, a level which some market participants believe represents a period of market balance in Chinese iron ore, the last few months have seen a reversal.

 
The rise in port stocks appeared to coincide with a decline in import prices ove Q2 but now conditions appear to be reversing again

After hitting $60/tonne CFR for the MBIOI62 in April, a level which some market participants believe represents a period of market balance in Chinese iron ore, the last few months have seen a reversal. Surplus supply conditions, notably at ports where inventories have moved ahead of 100M tonnes, had coincided with a fairly sharp retreat in prices of more than 14% into June. At the time of writing, however, in early July, port stocks have continued to increase and at an accelerating pace but contrary to expectations, so too have prices.


Last year's drawdown is long gone with inventories rising to record...

Published

Alistair Ramsay

July 19, 2016

00:00 GMT