COLUMN-Everybody but the curve thinks iron ore is going down: Clyde Russell

martes 22 de abril de 2014 01:15 GYT

(The opinions expressed here are those of the author, a columnist for Reuters.)

By Clyde Russell

LAUNCESTON, Australia, April 22 (Reuters) - It's hard to find any bullish predictions for iron ore prices, with the consensus being that it will drop to below $100 a tonne. Except this isn't reflected in the financial markets.

The latest bearish signal for iron ore is the decision by an Indian court to allow the mining of 20 million tonnes per annum in the state of Goa, most of which will end up on the export markets.

While this isn't enough ore to cause prices to slump, it adds to the overall growth in supply, which is widely expected to overwhelm growth in demand, especially as top buyer China's economy loses some momentum.

But despite the bearish outlook, the actual pricing for iron ore, both in the spot and futures markets, is holding up well.

Asian spot prices .IO62-CNI=SI were $113.30 a tonne on Monday, down 15.6 percent so far this year. But they are up 8.2 percent from the year low of $104.70 on March 10 and 31 percent above the 2012 low of $86.70, which was the weakest price for three years.

But more importantly than the spot market, the main paper markets are also showing pricing resilience.

The curve for Singapore iron ore swaps <0#SGXIOS:> has a good track record of pointing to turns in market pricing.   Continuación...