Iron Ore Market Update

Iron ore has been rangebound this year, trading between about $120 to $170.

Iron Ore Price, 2022 YTD

Currently, it is at about $146, roughly in the middle of its 2022 trading range. It has been trending up the last few weeks because of China’s COVID reopening. The reopening and stimulus impulses should support prices for the short-term. Downside risks include Chinese policy response against high commodity prices, and actual commodity demand not meeting expectations.

This is not the optimum setup for shorting. Prices need to go closer to the upper bound of the trading range first, and there should preferably be emerging signs of peaking demand. However, no one can predict the timing of the turnaround in price movement accurately, so we just to constantly monitor news flow and prices. The turnaround can happen anytime, even tomorrow or next year.

Personally, I am hoping for prices to go much higher, as the probability of successful short trades increases the higher prices go. When prices burst above $200 last year, it was a once-in-a-generation type of shorting opportunity. I don’t expect a repeat this year, but if prices can reach at least $180, it would still be an excellent trading opportunity.

Author: novaliser

I have been trading since 2012, and retired from the corporate world in Dec 2021 after accumulating enough profits to feel comfortable living without a stable monthly income.

Leave a Reply