In this report, we will make a brief reference to the technical analysis of iron ore. The price index of 62% carat iron ore in Chinese ports fell by $ 12.1 on Thursday to $ 171.5 per ton, which is the lowest price level in the four months of this report. The field of transaction statistics. Therefore, the data of this report can be relied on with high confidence. Stay tuned to Artan Press.
*** Technical analysis of iron ore from the perspective of Chinese market transactions
Prices for 63.5 percent pure iron ore shipments for delivery in Tianjin fell to $ 180.5 a tonne, the lowest level since April 19 due to weak seasonal demand, and according to some sources, Chinese steelmakers should cut production. My Steel Consulting data show that weekly consumption of major steel products in China fell 2.5 percent to 9.86 million tonnes as of August 5, compared to the previous week.
Meanwhile, steelmakers in Anhui, Gansu, Fujian, Jiangsu, Jiangxi, Shandong and Yunnan provinces were told to limit production to 2020 following China’s efforts to curb carbon emissions. In addition, China increased export tariffs on some steel materials and eliminated discounts on rolled products.
*** Factors affecting technical analysis of iron ore
Prices have fallen by about 22% since the peak of $ 221 a month ago, largely due to the Chinese government’s plan to cut steelmakers’ production in the second half of the year. The chart below shows that iron ore prices have reached their highest annual decline.
Given that the failure of the price channel in early May is weaker than the drop in prices that occurred in late July, it seems unlikely that the global iron ore market will be able to recover in the short term. Due to China’s recent decisions to control iron ore prices, we will see lower prices in the six-month horizon. But this trend will not continue.
Because iron ore is a key commodity in the downstream steel chain, demand pressure will cause steel prices to rise at the same time as iron ore prices rise. According to Namdar below, every seven prices in iron ore in the past year has been accompanied by price compensation. This is a slow process but it will happen.
*** Secrets in the technical analysis of global iron ore
China imports about 1 billion tons of iron ore a year, and a $ 12 cut on Thursday means a $ 12 billion cut in production costs for Chinese steelmakers. This is an issue that many analysts have overlooked. The Chinese government wins this game. This decision is a big event for the Chinese government due to China’s high costs of developing its own commercial infrastructure and classification.
Unfortunately, many Chinese industries have fallen victim to this decision. But in communist thinking it justifies the purpose of the means. Therefore, knowing the deteriorating situation of some states in China, we will see the continuation of this pricing process and the dominance of this style of technical analysis of iron ore in the international market.
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