Iron ore prices down - weak data or rather politics?
Iron ore prices down – weak data or rather politics?

12 March 2024 – Iron ore prices in Asia have fallen – but is this really due to poor fundamental data or rather politics and short selling at the end of a restocking cycle? And first country raises serious concerns about the EU Carbon Border Tax CBAM at the WTO.

Iron ore prices fall – weak data or rather politics?

Iron ore prices on the Dalian Commodity Exchange have fallen over the past few days. Fittingly, this happened just as the 14th National People’s Congress was meeting in China. It is nothing new for supposedly bad news to be spread around political events.

Are short sellers cashing in after iron ore restocking?

And it is also quite possible that instead of bad fundamental data, the restocking of the major steel producers in China has simply been completed and a normal and temporary price correction has occurred. After all, rising exports from China and imports to China (e.g. from Germany) point to an economic recovery rather than “poor fundamental data”. And in the end only the short sellers will be happy.

Prices for nickel, zinc, lead, aluminum, copper and HRC were friendly on the SHFE today. The nickel price on the LME is also holding steady at more than $18,000 per tonne.

WTO: First complaint raised against CBAM

As was to be expected, according to media reports, the first country raised a complaint against the EU Carbon Border Tax CBAM with the World Trade Organization (WTO) at the end of February.

India expresses serious concerns

At a WTO meeting in Abu Dhabi on February 26, India expressed serious concerns about the increasing use of trade-protectionist unilateral measures that are being justified under the guise of environmental protection.

India is not alone in having “serious concerns” and is likely to be a major headache for the European Union in the coming months.

Does a WTO complaint against CBAM have any chance of success?

Even if we generally think it is a good thing that a complaint against this corrupt CBAM construct is being brought before the WTO, we believe that the chances of success are very slim – unfortunately. This was recently demonstrated by the complaint against the EU Safeguard Measure before the WTO, which the Commission ultimately ignored by making a few cosmetic changes to the text of the regulation.

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