Cliffs Natural Resources Jumps on China News, Iron Ore Price Flat

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Is China’s near-term demand situation for real?

Via Barron’s: “Cliff’s Natural Resources (CLF), for one, has jumped 3.1% to $25.09 today, continuing a hot streak that saw it gain 18% last week. [Wells Fargo’s] Dubinsky and Chaudhri explain: The increase was due to speculative trading on improved China sentiment; China’s National Development and Reform Commission increased its forecast for 2013 Chinese steel production growth to 9% YoY (to 780M MT), up from 4% YoY (to 746M MT). Chinese customs data also showed that Chinese imports of iron ore hit a record high in July (+17% MoM to 73.1M MT).”

Analysis: Iron Ore Market, Prices Rising?

On Monday, August 12, the cash price of steel billet fell by 7.7 percent on the LME, landing at $120.00 per metric ton and making it the day’s biggest mover on our steel and raw materials index. A $10.00 decline in the steel billet 3-month price on the LME left the price at $145.00 per metric ton.

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Chinese steel prices were flat for the day. The high price of iron ore 58% fines from India kept steady. The price of Chinese HRC remained essentially flat. For the fifth day in a row, the price of Chinese coking coal remained essentially flat.

The US HRC futures contract 3-month price rose 0.3 percent to $622.00 per short ton. The spot price of the US HRC futures contract held steady around $648.00 per short ton.

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