[ad_1]
With a public holiday in New South Wales, ACT, Queensland and South Australia, ASX trading volumes are quite low today.
So far, only 247 million shares have been traded for an average Monday volume of around 600 million shares.
The iron ore sector is exposed to any sudden changes in the Chinese economy, but has resisted so far. Champion Iron is down 3% to $ 4.50 and Fortescue is down 1% to $ 14.43, but the materials sector is up 0.5% thanks to gains by gold miners, Alumina and Boral.
China wants to keep emissions at 2020 levels, so has forced steel mills to slow down, reducing demand for iron ore. Credit:Bloomberg
Rio Tinto fell only 0.1% and BHP 0.4%.
Late last week, Oxford Economics chief economist Adam Slater said the fallout from the Evergrande collapse appeared “manageable.”
“The context of the Evergrande crisis is very different from the Lehman Brothers bankruptcy, the latter occurring at a time when global markets have been under great stress for a long time,” Slater wrote in a note to clients.
“Today’s markets, on the other hand, are buoyant and global liquidity is plentiful.”
If there was a slowdown in the Chinese real estate market, it would likely affect commodity and commodity prices. So far, oil prices have fallen slightly in Asian trading today with West Texas Intermediate (WTI) down 0.3% to US $ 75.64 a barrel and Brent crude down by the same. amounting to US $ 79.06 per barrel.
Copper prices are up 0.1 percent. Iron ore prices have not budged as they are usually set by traders in China, which is a public holiday until October 8.
But, according to Commbank commodities analyst Vivek Dhar, China imports 70 to 75 percent of the world’s iron ore imports, and the real estate construction industry absorbs up to 30 percent. Even before the Evergrande problems, the real estate sector was slowing down and any further defaults could make matters worse. However, it was the government’s attempts to reduce emissions that had the most impact on the demand for iron ore.
“In terms of what we see in the data, steel demand issues play a secondary role compared to reductions in steel production. Right now, the main factor driving down iron prices is the reduction in steel production, â€he said. Live markets.
[ad_2]
