RPT-COLUMN-Iron ore volatility masks positive shift in fundamentals: Russell
(Repeats earlier story with no change in text. The opinions expressed here are those of the author, a columnist for Reuters)
By Clyde Russell
LAUNCESTON, Australia, July 18 (Reuters) - Iron ore's wild price gyrations this year may be masking a small, but significant, shift in the underlying fundamentals for the steel-making ingredient.
While seaborne iron ore remains a well-supplied market, it appears the level of over-supply has been diminishing faster than many expected, leading to an improvement in the supply-demand balance.
This provides some fundamental justification for the rally in spot prices, with the China benchmark index .IO62-CNI=SI up almost 35 percent so far this year.
Let's be clear, there is no reason to believe that iron ore is poised for a major, sustained rally.
But there is reason to be hopeful that prices are more likely to pivot around the $50 a tonne mark, rather than revisit the December 2015 lows of $37 a tonne.
The main reasons for prices finding a floor are improvements on both the supply and demand side.
For demand, this is largely due to China, which buys about two-thirds of seaborne iron ore and is the world's largest steel producer. Continuación...