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Cliffs Natural Resources Inc. Message Board

  • csco_brat csco_brat Dec 19, 2012 6:10 PM Flag

    why are forward iron ore futures prices so much lower than front month

    every month you got out the price for iron ore is lower. If you believe those futuers prices, CLF will be making no money.

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    • That is a very good question. I was not aware of this. I don't have the answer.I hope someone does.

    • In commodities it usually means that the short term supply is lower than what everyone believes will exist in the future. The problem for the next several months however is that weather could curtail more supply from coming to the market and some mines are closing, so you would do well if you believe future supply will not increase to buy futures in IO two months out so you will still be in the winter months.

      • 1 Reply to rlbeard6734
      • What all of these traders will soon realize is that the average age of vehicles in the United States is around eleven years and is higher (older vehicles) in much of the world. A huge demand for steel is building - especially when you look at the eventual worldwide need for infrastructure. Commodity futures traders now think we are going into a world economic recession. I think they are totally in error and will realize that in about six months. Watch iron ore futures skyrocket at that time.

        Sentiment: Strong Buy

 
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