Steel and iron ore limit down!
Not much to add really, the title speaks for itself (limit down is -4% for rebar and Dalian iron ore). Singapore contracts are also trading under $80. This is getting very ugly for Australia now. I scarcely want to imagine where spot will finish up tonight, but unless there’s a big recovery in paper markets this afternoon, it’ll be below $80.
The Federal budget in May forecast iron ore at $100, a price many commentators thought was overly pessimistic (thus allowing the crafty Treasurer to claim a ‘surprise’ revenue beat). Well, triple figures looks like a dream from where we are today. And let us not forget the three ring circus that is the WA budget, which forecast iron ore at $122 across FY2015. There will have to be a substantial redistribution of GST revenues given the ruinous WA budget, which will further weigh on the Federal budget.
I said it at the time, the Coalition chose a fiendishly bad moment in Australia’s history to assume the reins in Canberra, considerably worst than Labor in 2007.
It’s a shame our house prices are so high relative to incomes, as they add yet another layer of risk to the unfolding Australia bust.
Unfortunately there was no recovery in paper markets this afternoon.
Here’s the daily Reuters piece. It’s a bloodbath, basically.
Spot down to $79.80, now off 40.5% this year in USD terms. More from FT.
Only sliver of good news is that AUDUSD is still getting pumped, meaning spot is now down 40% in AUD-terms, after exceeding USD-denominated losses for most of the year. Thank the almighty Fed for the USD rally, Nev.