Lincoln Electric’s (LECO) stock has been in a downward trend since March 2015. This can be attributed to the softness in demand and weakness in the oil and gas sector and US export markets.
Iron ore exports from Port Hedland totaled 38.4 million tons in June. In May, exports totaled 38 million tons. So that’s a jump of 14.3% year-over-year and 1.1% month-over-month.
In the week ending June 12, iron ore port inventories were 85.4 million tons. This is a decline of 2.1% week-over-week. The inventory level is the lowest since November 2013.
On June 16, Chinese steel prices fell to a new 12-year low of 2,337 yuan per metric ton. Weak fundamentals in steel prices translate to weak fundamentals for iron ore prices.
Japan accounts for 10%–13% of the seaborne market. So Japan’s iron ore imports are a good indicator of iron ore demand. Japanese iron ore imports totaled 11.1 million tons in April compared to 11.6 million tons in March.
Iron ore prices have staged a huge comeback, trading at $65 per ton on June 16. In early April, prices fell to a decade low of $47.08. This is a huge 38% correction. But prices are still quite low compared to 2014.
Auto sales in China (FXI) fell 0.5% year-over-year (or YoY) in April to 1.99 million vehicles. Growth for April was the lowest for China’s auto sales since February 2013.
BHP Billiton (BHP) chose the demerger approach after considering many alternatives to simplify its portfolio. It plans to focus on its core operations.
The iron ore price slide has been particularly pronounced in the last few weeks, as Chinese demand didn’t pick up as expected after the New Year holiday.
