A bit of a damp squib for iron ore today. Expectations that we may see some form of breakout have been put to bed with the futures failing to the upside and holding the downside. U.S elections are not that interesting after all!
It may not be a case of stick or bust but the futures will need to produce a positive close tomorrow above the 792 level otherwise it has the potential to attacked by a big angry bear. Dec futures were pretty much in unchanged yesterday at 113.39 as the Australian weekly exports climbed to 18.2 million tons from 16.7 million tons a week earlier (Bloomberg), supply is not slowing down which would explain why resistance levels are holding despite the PMI figures.
The Capesize market started well with the November futures trading up to 15,400 before running into heavy resistance as the Index came in at – 754, which was on the high side of expectations (Rocco Ferrajina, FIS). Taking the positive view on the market this was the day 10 of this bear move lower with the December futures up 1.6% to USD 14,375, Q1 up 2.6% to USD 7,950 and the Cal a little more sedated at USD 12,987 up 0.5%. With out spoiling the morning technical if the December futures are above and stay USD 14,333 you may find yourself witnessing a little rally.
The Panamax was pretty rangebound with support buyers who tried and failed to take on market sellers early on. The futures have held onto a positive number but will need to make a decision on the open as the close for the Dec is USD 9,375 with tomorrows pivot at USD 9,383; will the shorts hold there nerve or will it be a case of cover on the open? Who blinks first?
Cape versus Panamax spread had a better day, going from USD– 75 to plus USD 75. Maybe people read this after all!
The Supramax may have had another negative index but that is not stopping the paper market. November was up USD 200 to a high of USD 9,750 with the Dec up 0.5% to USD 9,200, Q1 up 1% to USD 7,575 whilst the Cal 21 traded at USD 8,900 into the close, up 1.1%. Now, before my vacation last week we noted on a couple of occasions that when the Calendar moved the rest of the curve went up the following day. We have the Capesize and Panamax in balance, if one goes, they all go.
Brent has had another corker, partly due to the headlines yesterday but probably more to do with the U.S. election. It was a bad day at the office for the greenback yesterday and to be fair, it is not having a cracker today. Upside moves in the Bloomberg Dollar index have been all but erased, giving Brent some much needed support. Does it keep going? Let’s see what happen in in the election before I commit to that one
Have a nice evening.