FURTHER DAMAGE TO THE SECOND HALF RECOVERY THEORY

At the centre of second half recovery theories was also the rebound seen in a number of Chinese indicators including iron ore data.

Now Chinese iron ore prices have fallen again recently and there has been a pickup in iron ore port stocks. More alarming however is the sharp rise in total ships (Panamax and Capesize) sitting at anchor off Chinese ports waiting to offload iron ore stocks. The number has risen to 75 from 55 at the beginning of February and 21 at the beginning of the year.

In addition daily rates for capesize vessels have plunged in recent days to $24000 from a recent high of $43000. Australian and Brazilian iron ore freight rates into China have fallen by 15-20% since last week.