Toekomstbeeld schreef op 18 mei 2017 08:28:
Als er ook nog maar iemand is die dacht dat prijzen voor Iron Ore op basis van vraag en aanbod tot stand kwamen, dan is die na het lezen van onderstaand verhaal een stuk wijzer.
Niets anders dan speculanten die extreem handelen en speculeren zonder ooit zelf de grondstof te bezitten.
Blijkbaar gaan de grote staalbedrijven over tot het hedgen van de behoefte die ze hebben om het prijsrisico te elimineren.
asia.nikkei.com/Markets/Commodities/I...May 18, 2017 1:00 pm JST
Iron ore volatility forcing steelmakers to bend on hedging, pricing
China's Baosteel embraces derivatives, Japanese may follow
TOKYO -- The global steel industry is contending with an increasingly volatile market for iron ore, an essential input whose price has been on a roller-coaster ride driven by inflows of speculative investment.
At the Singapore Iron Ore Forum in late April, executives from Asian steelmakers vented their frustration at what has become an almost monthly cycle of wild ups and downs in the commodity. Some steel producers are embracing financial derivatives -- something Japanese majors had been reluctant to do -- to shield themselves from this volatility.
Spot iron ore shot up to nearly $100 a ton in February -- more than double a low below $40 plumbed in January 2016. The price then turned downward, slipping under $60 a ton this month.
Iron ore prices for high-volume buyers used to be decided by one-year contracts between mining groups and steelmakers. But as Chinese spot purchases of the commodity grew, a switch was made to quarterly pricing based on the prevailing price for immediate delivery.
Fast money
Even as mine output increases have created a glut on the supply side, a combination of futures trading and Chinese money has kept the ore price gyrating. Iron ore futures debuted on China's Dalian Commodity Exchange in 2013 -- and on the Singapore Exchange in the same year -- with trading volume ratcheting up quickly.
On at least one day in 2016, the amount of iron ore traded in contracts on the Dalian exchange surpassed the 1 billion tons the country imports in a year.
The commodity has attracted Chinese day traders seeking to make a quick yuan. Even faster are high-frequency traders -- funds armed with computer programs that can make thousands of transactions per second. Chinese high-frequency traders are participants in Dalian-listed iron ore futures, according to Yoshikazu Ito, branch general manager at a commodity business unit of Japan's Sumitomo Corp.
Iron ore futures have become an investment asset in their own right, one that has shown an increased correlation to crude oil. The development of the futures market has had the effect of magnifying swings in spot ore prices.
Steelmakers cannot pass on such short-term fluctuations in input costs to their customers, so the volatility spreads to their earnings. Baosteel, one of China's biggest producers of the metal, will increase iron ore swap transactions as a means of controlling price risk, according to Assistant General Manager Ji Chao.