Iron Ore a Fade and a Seasonal Uplift in Aud? - ING
Analysts at ING Bank explained that iron ore dynamics point to seasonal AUD uplift, fade this effect.
"Qingdao iron ore prices have surged since bottoming around the US$40/tonne in mid-Jan, although our commodities analysts have been questioning the durability of the rally. Specifically, they note that gains have been largely attributable to increased purchases by Chinese and global steel mills (with overall capacity utilisation increasing from 64.6% in Dec 2015 to 66.2% in Feb 2016)."
"This demand is likely to be unsustainable in the absence of further stimulus spending by Chinese officials. On the supply side, recent production changes (ie, lower output estimates) are likely to be of a temporary nature, with the general trend reverting to increases in iron ore production as we head into 2017. Our house view is that iron ore prices will fall back to US$50/tonne in 2Q16 as seasonal effects fade."