Iron ore trend upIron ore has been sufffered quite alot about tariffs but for economical reasons it has changed it and the way is up
PAC1! trade ideas
iron orewow wow.
Look at the price of iron ore.
now sitting at support level.
considering the price of everything has doubled
since 2020 and the real price of iron ore should be lower.
anyhows, I think the chinese people have had enough
of the imperial outpost. They must be accumulating
iron ore from South america and africa. The mines
they invested in decades ago are not pumping output.
I expect the Iron ore price to go back to $10.
SGX Iron Ore: Retest of 2025 Lows Back in PlaySitting in an established downtrend and with momentum indicators providing bearish signals, a retest of the 2025 lows may be on the cards for SGX iron ore.
A move below $93—where the price bottomed on Monday—would allow for shorts to be established targeting $91.75. A tight stop above would protect against reversal. Alternatively, if the price bounces towards downtrend resistance running from the May highs, bearish positions could be set with a stop above for protection.
If the trade target is achieved, either setup could be reevaluated with a more pronounced support zone located beneath $90.
Good luck!
DS
IO Weekly Technicals Review [2024/48]: Bullish Trend to PersistSGX TSI Iron Ore CFR China (62% Fe Fines) Index Futures (“SGX IO Futures”) rose last week, closing USD 4.17/ton higher by 29/Nov (Fri).
SGX IO Futures opened at USD 99.85/ton on 25/Nov (Mon) and closed at USD 104.02/ton on 29/Nov (Fri).
Prices briefly touched a weekly high of USD 104.85/ton on 29/Nov (Fri) and a low of USD 99.80/ton on 25/Nov (Mon). It traded in a range of USD 5.05/ton during the week.
Prices traded above the pivot point of USD 99.30/ton for the entire week and closed above the R1 point of USD 102.90/ton.
Volume peaked on 28/Nov (Thu), as iron ore prices declined gently. The market balanced optimism in China’s steel market against disappointing economic data.
Iron Ore Fundamentals in Summary
Iron ore prices posted a second weekly gain on 29/Nov (Fri), driven by signs of recovery in China’s steel industry and expectations of further stimulus from Beijing by year-end.
Losses at Chinese mills narrowed in October, supported by government growth measures, but overcapacity and weak property demand keep steel among the economy's worst-performing sectors.
Cumulative losses in China’s steel industry dropped to 23 billion yuan (USD 3 billion) in the first 10 months, down from 34 billion yuan over nine months.
China’s manufacturing PMI for November came in at 50.3, beating analyst expectations of 50.2 and last month’s figure of 50.1.
China's port iron ore stockpiles dropped 1.5% to 148.5 million tons in the week ending 29/Nov, according to Steelhome data.
Based on seasonality, SGX IO Futures Jan contract trades 6.9% below its last 5-year average (USD 111.12/ton).
Short-Term Moving Averages Indicate Reversal in Bearish Trend
The gap between the 9-day and 21-day moving averages narrowed earlier in the week, culminating in a golden cross on 28/Nov, when the 9-day moved above the 21-day. This signals the potential onset of a bullish trend.
Long-Term Averages Signal Growing Bullish Trend
IO prices closed below the 200-day Displaced Moving Average (DMA) and oscillated between the 200d-DMA and 100d-DMA throughout the week. Prices are inching towards the 200d-DMA at USD 105/ton which could act as near-term price resistance.
MACD Points to Strengthening Bullishness, RSI Grew But Still Neutral
The MACD indicated a strengthening bullish trend throughout last week. Meanwhile, the RSI is at 54.13, signaling a neutral trend treading just above the midpoint, while the RSI-based moving average is at 49.44.
Volatility Declines, Price Tests 50% Fibonacci Level
Volatility declined sharply last week. Prices broke above the 38.2% Fibonacci level to test the 50% level & held resistance there. With upward momentum since 18/Nov (Mon), support is now expected at USD 103.15/ton (38.2% retracement), with resistance at USD 105.40/ton.
Selling Pressure Eased, Price Trading at High Volume Nodes
Selling pressure remains dominant but has eased compared to last week, according to the Accumulation/Distribution (A/D) indicator. The price trades at a high-volume node, which may act as resistance or support this week.
Iron Ore Prices Set to Climb Ahead of Lunar New Year
Iron ore prices generally increase in November and December due to seasonal patterns that prompt restocking in anticipation of China's Lunar New Year, driven by higher demand for steel production. Since 2014, the average growth has been 7.6%.
Hypothetical Trade Setup
With seasonally strong demand ahead of the Lunar New Year, improving conditions for Chinese steelmakers, expectations of further stimulus, and a stronger-than-expected manufacturing PMI, iron ore prices are poised to rise. To express a bullish view with limited risk, consider a bullish put spread using SGX IO options.
This strategy involves selling a put at a higher strike (USD 99/ton) to collect premiums of protection against downside risk. To limit the downside risk, the second leg of the trade involves buying a put at a lower strike (USD 95/ton). This offers a fixed reward-to-risk profile.
A hypothetical setup with a short put at USD 99/ton and a long put at USD 95/ton, expiring on 31/Jan, provides a maximum upside of USD 118/lot (if IO prices remain above USD 99/ton). This strategy exposes the investor to a max loss of USD 282/lot (if IO prices drop below USD 95/ton). The breakeven for the trade is at USD 97.82/ton.
Option premiums are based on settlement prices as of the close of markets on 29th November 2024.
DISCLAIMER
This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services.
Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
Bearish Iron Ore Bias Intact, Watching $94.75SGX iron ore looks heavy, threatening to extend the bearish break that began a week ago. The test and rejection at horizontal resistance at $97.35 last Thursday only adds to the bearish picture from momentum indicators like RSI (14) and MACD, reinforcing the bias to sell pops and downside breaks.
The price now finds itself at an interesting spot on the charts, sitting just above $94.75 after briefly dipping below it during thin overnight trade on Monday. While the bias remains lower, subdued volumes on either side of the weekend serve as a warning not to get overly bearish without a clear catalyst.
If the price can take out the overnight low and hold below $94.75, consider initiating shorts beneath the level with a stop above, targeting a potential retest of the April 9 low at $91.75.
Alternatively, if $94.75 continues to attract buyers, the setup could be flipped with longs established above the level with a stop beneath for protection. Downtrend resistance kicks in around $97, just above resistance at $97.35. They’re two potential targets.
Good luck!
DS
SGX Iron Ore: Evening Star Reversal Skews Risks LowerHaving completed a bearish reversal pattern and with bullish momentum starting to fade, traders should stay alert to the risk of renewed downside in SGX iron ore futures.
A three-candle evening star has knocked the price back below $100 per tonne, putting the spotlight on the 50-day moving average for those eyeing potential bearish setups. A clean break below could invite fresh shorts, allowing for a stop to be placed above for protection.
Former downtrend resistance from March 27 may now act as support, offering a potential target around $98 today. Beyond, $96 and $94.75 are levels of interest for those seeking greater risk-reward.
While momentum indicators had swung bullish over the past week, that’s now starting to reverse. RSI (14) has broken its short-term uptrend, and MACD looks toppy. With modest volumes accompanying the reversal, patience is warranted.
Good luck!
DS
Bearish Bias Builds as SGX Futures Test Key SupportSGX iron ore finds itself teetering on key technical support, unable to muster any meaningful bid despite significant gains in other China-linked plays on Tuesday.
$95.40 is the level we’re watching, waiting for a definitive move to signal how to proceed. A downside break would open the door for a flush towards $89.30, generating a setup where shorts could be established beneath the level with a stop above for protection. Alternatively, if the price were to bounce, the setup could be flipped, targeting a move back towards former support at $99.
Momentum signals are firmly bearish with RSI (14) trending strongly lower but not yet oversold. MACD has confirmed the signal, crossing from above beneath 0 earlier this month. The backdrop therefore favours selling rips and bearish breaks.
Good luck!
DS
IO Weekly TA [2025/12]:Bears Growl Amid Falling Prop InvestmentsSGX TSI Iron Ore CFR China (62% Fe) Index Futures (“IO Futures”) dropped last week, closing USD 3.60/ton lower by end of week.
Friday’s T+1 session is depicted as the following Monday’s trading session on TradingView.
IO Futures opened at USD 103.60/ton on 17/March (Mon) and closed at USD 100/ton on 21/Mar (Fri).
Prices briefly touched a weekly high of USD 103.75/ton on 17/Mar (Mon) and a low of USD 99.05/ton on 21/Mar (Fri). It traded in a range of USD 4.70/ton during the week, which was narrower than the prior week.
Prices crossed the S1 point of USD 100.10/ton and pivot point of USD 102.15/ton during the week, closing below the S1 (USD 100/ton).
Volume peaked on 17/March (Mon) as previously idled mines and beneficiation plants resumed operations post-major meetings.
Iron Ore Fundamentals in Summary
Prices hovered near their 3-month low as China’s steel industry’s recovery remains sluggish despite Beijing’s policy support.
China’s property sector continues to struggle , with January–February data showing a steep 9.8% drop in investment and a 5.1% decline in sales YoY. New construction starts plummeted 29.6%, extending 2024’s 23% slump.
Citi expects iron ore prices to remain capped unless China's steel demand sees a significant rebound. The bank projects for IO to trade around USD 100/ton, citing minimal supply disruptions in Australia and Brazil and anticipating faster supply growth. UBS forecasts prices averaging USD 100 in 2025, dipping to USD 95 in 2026 and USD 90 in 2027.
China's port IO stockpiles increased by 0.27 million tons (+0.2%) WoW to 141.44 million tons for the week ending 21/Mar as per MMI data .
Based on seasonality, IO Futures April contract trades 20.3% below its last 5-year average (USD 124.35/ton).
Short-Term MA Signals Imminent Downtrend amid Demand Woes
The 9-day and 21-day moving averages suggest that bearish momentum remains intact. With the gap between them widening, the odds of a bullish crossover in the near term appear slim—unless prices mount a decisive comeback.
Prices Trend Down Amid Potential Long-term Moving Average Convergence
IO prices are trading well below 100-day & 200-day DMAs, which now act as support levels. Will prices revert towards longer-term averages or sustain their downward trajectory?
MACD Signals Weakening Bearish Momentum, RSI Stalls in Neutral Zone
The MACD line is near the signal line suggesting weakening momentum of the bearish trend. Meanwhile, the RSI is at 40.39, suggesting a weak momentum phase, leaning toward bearish territory but not yet oversold.
Volatility Steady & IO Prices Close Below 61.8% Fibonacci Levels
Volatility remained steady this week. Prices traded between the 78.6% Fibonacci level (USD 98.85/ton) and the 38.2% level (USD 104.20/ton), closing below the 61.8% Fibonacci level. Going forward, 61.8% Fibonacci level (USD 101.05/ton) may act as resistance, with 78.6% Fibonacci level (USD 98.85/ton) as support.
Buying Pressure Softened & IO Prices Trade Below Below Basis Bollinger Band Levels
Buying pressure softened during second half of last week based on A/D indicator. IO prices gradually fell from the basis band towards the lower band closing at USD 100.25/ton.
China’s Two Sessions: A Key Catalyst for Iron Ore Market Swings?
China's Two Sessions (Lianghui) is an annual political gathering in China where key economic and industrial policies are set. This can significantly impact China linked assets including iron ore. Over the past four years (2021-2024), prices have shown a pattern of pre-meeting speculation-driven gains, followed by declines due to policy interventions or cautious economic targets. While 2021 and 2022 saw initial optimism fueling price spikes before corrections, 2023 and 2024 featured steady declines amid weak demand and rising inventories. This trend underscores China's policy direction as a key driver of iron ore market fluctuations.
Source: TradingView Data and Mint Finance Analysis
IO Futures Only Aggregate Exposure
Financial Institutions (FIs) and Managed Money participants are net long with 103k lots and 33.3k across all futures expiries. Physicals participants and Others are net short with 105.6k and 30.8k lots respectively across all futures expires. Managed Money decreased net long positions. Physicals increased net short positions while FIs increased net long positions last week. Overall futures open interest was 1,262,337 lots as of 14/March (+10.6%) while it was 1,141,304 lots as of 07/March.
Source: SGX
IO Futures & Options Aggregate Exposure
Financial Institutions (FIs) and Managed Money participants are net long with 96.6k lots and 40.4k across all futures and options expiries. Physicals participants and Others are net short with 98.8k and 38.2k lots respectively across all futures and options expires. Managed Money increased net long positions, Physicals increased net short positions while FIs increased net long positions last week. Overall futures and options open interest was 1,528,361 lots as of 14/March (+9.2%) while it was 1,399,761 lots as of 07/March.
Source: SGX
Historical Futures Aggregate Exposure by Market Participants
Physical participants continue to maintain their short position. Managed Money participants have switched from net short to being net long in the last six weeks. Financial Institutions continue to hold net long positions since the second quarter of last year.
Source: SGX and Mint Finance Analysis
Hypothetical Trade Setup
IO prices linger near a three-month low as China’s steel sector struggles to gain momentum, despite policy boosts from Beijing. The ongoing downturn in the property market, marked by plunging investment and sales, further weighs on sentiment. This contrasts with past years when hopes of economic stimulus fuelled early-session rallies in 2021 and 2022.
MACD hints at fading bearish momentum, while RSI stalls near neutral zone. Iron ore prices slipped from above the 50% Fibonacci level, closing just below the 61.8% mark—suggesting a strengthening bearish grip.
Against this backdrop, this paper posits a short position in SGX Iron Ore Futures expiring on 30th April 2025 (FEFJ2025) with an entry at USD 100.80/ton combined with a take profit level at USD 96.30/ton and a stop-loss at USD 104.40/ton resulting in a reward-to-risk ratio of 1.25x.
DISCLAIMER
This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services.
Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
IO Weekly Technicals Review [2025/11]: Bullish Momentum BuildsSGX TSI Iron Ore CFR China (62% Fe Fines) Index Futures (“SGX IO Futures”) rose last week, closing USD 3.35/ton higher by 14/March (Fri).
SGX IO Futures opened at USD 100.05/ton on 10/March (Mon) and closed at USD 103.40/ton on 14/March (Fri).
Prices briefly touched a weekly high of USD 104.15/ton on 14/March (Fri) and a low of USD 98.85/ton on 11/March (Tue). It traded in a range of USD 5.30/ton during the week, which was wider than the prior week.
Prices crossed the pivot point of USD 100.75/ton and R1 point of USD 102.55/ton during the week, closing between the R1 point and the R2 point at USD 104.65/ton.
Volume peaked on 14/March (Fri) owing to a surge in investor sentiment as steelmakers ramped up production during peak construction season in March.
IO Fundamentals in Summary
Steel consumption recovery fuelled optimism, pushing prices to a two-week peak, while stimulus hopes to reignite following the conclusion of China’s Two Sessions.
The average daily hot metal output climbed for the third consecutive week to 2.31 million tons. Additionally, with pig iron production on the rise & downstream demand strengthening, the industry’s overall consumption is gaining momentum, offering solid support for IO prices.
Moreover, China’s central bank announced on Thursday last week, its plan to lower interest rates & the reserve requirement ratio when appropriate while ensuring ample liquidity, boosting market confidence.
China's port IO stockpiles dropped by 1.80 million tons (-1.26%) WoW to 141.17 million tons for the week ending 14/March as per MMI data .
Based on seasonality, SGX IO Futures April contract trades 18.32% below its last 5-year average (USD 125.43/ton).
Short-Term MA Signal Imminent Uptrend Following Demand Recovery
The 9-day and 21-day DMAs are starting to reverse its divergence following a sharp rally in IO prices, suggesting potential further gains in the short-term strengthened by robust steel demand and rising mill profitability.
IO Prices Rallied Past its 100-day & 200-day DMA
IO prices rallied past its 100-day & 200-day DMAs last week and closed marginally above the 200-day DMA and below its 100-day DMA. Buoyancy in IO prices driven by stimulus hopes & seasonality augurs for strengthening bullishness in the near term.
MACD Signals Weakening Bearish Momentum, RSI Points Towards Neutrality
The MACD suggests bullish momentum is heating up, with the 12-day & 26-day moving averages converging, hinting at further upside potential. Meanwhile, the RSI at 46.96 paints a neutral market sentiment, leaving room for the next big move.
Volatility Falls Sharply & IO Prices Closed Below 50% Fibonacci Level Amid Uptrend
Volatility declined sharply this week. Prices traded between the 78.6% Fibonacci level (USD 98.95/ton) and the 38.2% level (USD 104.45/ton), closing below the 50% Fibonacci level. Going forward, 38.2% Fibonacci level (USD 104.45/ton) may act as resistance, with 61.8% Fibonacci level (USD 101.20/ton) as support.
Buying Pressure Strengthened & IO Prices Trade Below Basis Bollinger Band Levels
Buying pressure strengthened during second half of last week based on A/D indicator. IO prices have been well supported at the lower band of the Bollinger. IO prices have steadily climbed from the lower to the basis band during the week and closed marginally below at USD 102.25/ton.
China’s Two Sessions: A Key Catalyst for Iron Ore Market Swings?
China's Two Sessions (Lianghui) is an annual political gathering in China where key economic and industrial policies are set. This can significantly impact China linked assets including IO. Over the past four years (2021-2024), prices have shown a pattern of pre-meeting speculation-driven gains, followed by declines due to limited policy interventions or cautious economic targets. While 2021 and 2022 saw initial optimism fueling price spikes before corrections, 2023 and 2024 featured steady declines amid weak demand and rising inventories. This trend underscores China's policy direction as a key driver of iron ore market fluctuations.
Source: TradingView Data and Mint Finance Analysis
IO Futures Only Aggregate Exposure
Financial Institutions (FIs) and Managed Money participants are net long with 91.6k lots and 38.9k across all futures expiries. Physicals participants and Others are net short with 90.5k and 39.9k lots respectively across all futures expires. Managed Money decreased net long positions. Physicals decreased net short positions while FIs increased net long positions last week. Overall futures open interest was 1,141,304 lots as of 7/March (-8.6%) while it was 1,249,118 lots as of 28/Feb.
Source: SGX
IO Futures & Options Aggregate Exposure
Financial Institutions (FIs) and Managed Money participants are net long with 90.6k lots and 37.2k across all futures and options expiries. Physicals participants and Others are net short with 80.1k and 47.7k lots respectively across all futures and options expires. Managed Money decreased net long positions. Physicals decreased net short positions while FIs increased net long positions last week. Overall futures and options open interest was 1,399,761 lots as of 7/March (-6.71%) while it was 1,500,490 lots as of 28/Feb.
Source: SGX
Historical Futures Aggregate Exposure by Market Participants
Physical participants continued to maintain a net short position. Managed Money participants have switched from net short to being net long over the last five weeks but have been sharply reducing their long positions. Financial Institutions continue to hold net long positions since the second quarter of last year.
Hypothetical Trade Setup
IO prices surged to a two-week high, driven by brighter China steel demand outlook and hopes of stimulus to drive domestic Chinese consumption. China’s Two Sessions unveiled a fresh stimulus plan, while the central bank reaffirmed its commitment to lower interest rates and reserve requirement ratio, igniting market optimism. This mirrors past trends where economic support hopes drove pre-session gains in 2021 & 2022.
Prices climbed 3%, fuelled by bullish momentum. The MACD hints at fading bearish pressure as short- and medium-term moving averages converge. Prices bounced off the 78.6% Fibonacci level, closing marginally below the 50% mark, indicating bullishness.
Against this backdrop, this paper posits a long position in SGX Iron Ore Futures expiring on 30th April 2025 with an entry at USD 102.20/ton combined with a take profit level at USD 105.70/ton and a stop-loss at USD 98.70/ton resulting in a reward-to-risk ratio of 1x.
DISCLAIMER
This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services.
Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
IO Weekly Technicals Review [2025/10]: Bearish Outlook GrowsSGX TSI Iron Ore CFR China (62% Fe Fines) Index Futures (“SGX IO Futures”) declined last week, closing USD 1.75/ton lower by 7/Mar (Fri).
Friday’s T+1 session is depicted as the following Monday’s trading session on TradingView.
SGX IO Futures opened at USD 102.20/ton on 3/Mar (Mon) and closed at USD 100.45/ton on 7/Mar (Fri).
Prices briefly touched a weekly high of USD 102.85/ton on 3/Mar (Mon) and a low of USD 98.95/ton on 5/Mar (Wed). It traded in a range of USD 3.90/ton during the week, which was narrower than the prior week.
Prices remained below the pivot point of USD 104.05/ton and R1 point of USD 102.55/ton during the week, closing below the pivot point at USD 100.75/ton. Volume peaked on 3/Mar (Mon).
Volumes last week rebounded back to pre-CNY levels.
Iron Ore Fundamentals in Summary
Iron ore futures took a hit as China’s steel production cuts and escalating trade tensions between Washington and Beijing dampened market sentiment.
With inventory levels at major Chinese steel mills dipping, demand trends must be carefully observed.
While declining Chinese imports signal a bearish outlook, market sentiment remains fluid. Chinese policymakers hinted at further stimulus measures, suggesting that if economic growth falters, additional support could be on the table—potentially offering a lifeline to the struggling bulk commodities market.
Iron Ore inventory at Chinese ports declined by 142.97 million tons, representing a decline of 3.5% for the w/e 7th Mar 2025.
Based on seasonality, SGX IO Futures Apr contract trades 23.3% below its last 5-year average (USD 130.78/ton).
Short-Term MA Signals Extended Downtrend as China’s Imports Slump
Formation of a death cross on 3/Mar (Mon) plunged iron ore prices sharply lower and the sell-off has been further exacerbated by Trump’s tariff policies and a drop in China's imports, leading to a sharp downtrend.
Prices Trend Downward Amid Potential Long-term Moving Average Divergence
IO prices are trading well below the 100-day & 200-day DMAs. The 100-day moving average marginally inched past the 200-day moving average forming a golden cross on 26th Feb 2025. Given the near term bearishness, IO prices look stubbornly bearish and are unlikely to rally on long term moving average golden cross formation.
MACD Confirms Deepening Downtrend, RSI Inches Towards Oversold Conditions
The MACD line is below the signal line suggesting weakening short-term momentum. Meanwhile, the RSI is at 36.61 inching towards but not yet in oversold conditions. RSI-based moving average hovers at 46.57.
Volatility Steady & IO Prices Closed Below 61.8% Fibonacci Level
Volatility remained steady this week. Prices traded between the 78.6% Fibonacci level (USD 98.00/ton) and the 61.8% level (USD 100.32/ton), closing below the 61.8% Fibonacci level. Going forward, 78.6% Fibonacci level (USD 98.00/ton) may act as support, with 50.0% Fibonacci level (USD 101.879/ton) as resistance.
Buying Pressure Strengthened & IO Prices Trades At Lower Bollinger Band
Buying pressure strengthened during second half of last week based on A/D indicator. IO prices traded below the lower Bollinger band during the week and closed marginally above the band at USD 100.25/ton.
China’s Two Sessions: A Key Catalyst for Iron Ore Market Swings?
China's Two Sessions (Lianghui) is an annual political gathering in China where key economic and industrial policies are set. This can significantly impact China linked assets including iron ore. Over the past four years (2021-2024), prices have shown a pattern of pre-meeting speculation-driven gains, followed by declines due to policy interventions or cautious economic targets.
While 2021 and 2022 saw initial optimism fueling price spikes before corrections, 2023 and 2024 featured steady declines amid weak demand and rising inventories. This trend underscores China's policy direction as a key driver of iron ore market fluctuations.
Source: TradingView Data and Mint Finance Analysis
IO Futures Only Aggregate Exposure
Financial Institutions (FIs) and Managed Money participants are net long with 87.9k lots and 117.6k across all futures expiries. Physicals participants and Others are net short with 147.7k and 57.8k lots respectively across all futures expires. Managed Money decreased net long positions; Physicals decreased net short positions while FIs increased net long positions last week. Overall futures open interest was 1,249,118 lots as of 28/Feb (+2%) while it was 1,224,213 lots as of 21/Feb.
Source: SGX
IO Futures & Options Aggregate Exposure
Financial Institutions (FIs) and Managed Money participants are net long with 89.3k lots and 119.9k across all futures and options expiries. Physicals participants and Others are net short with 144.9k and 64.3k lots respectively across all futures and options expires. Managed Money decreased net long positions; Physicals decreased net short positions while FIs increased net long positions last week. Overall futures and options open interest was 1,500,490 lots as of 28/Feb (-1.63%) while it was 1,525,430 lots as of 21/Feb.
Source: SGX
Historical Futures Aggregate Exposure by Market Participants
Physical participants have continued to maintain their net short position. Managed Money participants have switched from net short to being net long in the last three weeks. Financial Institutions continue to hold net long positions since the second quarter of last year.
Source: SGX
Hypothetical Trade Setup
Iron ore prices have declined owing to China’s steel production cuts and escalating trade tensions between Washington and Beijing dampened market sentiment. With inventory levels at major Chinese steel mills dipping, demand trends have seemed to fallen.
IO prices signaled downtrend last week. The MACD signals strengthening bearishness while the RSI is nearing the oversold territory. IO prices closed below the 61.8% levels indicating bearishness.
Against this backdrop, this paper posits a short position in SGX Iron Ore Futures expiring on 30th April 2025, with an entry at USD 100.80/ton combined with a take profit level at USD 98.10/ton and a stop-loss at USD 103.50/ton resulting in a reward-to-risk ratio of 1x.
DISCLAIMER
This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services.
Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
IO Weekly Technicals Review [2025/09]: IO In Strong DowntrendSGX TSI Iron Ore CFR China (62% Fe Fines) Index Futures (“SGX IO Futures”) declined last week, closing USD 6.20/ton lower by 28/Feb (Fri).
SGX IO Futures opened at USD 108.20/ton on 24/Feb (Mon) and closed at USD 102.00/ton on 28/Feb (Fri).
Prices briefly touched a weekly high of USD 108.60/ton on 24/Feb (Mon) and a low of USD 101.45/ton on 03/Mar (Mon). It traded in a range of USD 7.15/ton during the week, which was wider than the prior week.
Prices fell below S2 pivot point at USD 102.15/ton and settled below this level.
Volume peaked on 28/Feb (Fri) as prices declined by more than 3% with concerns over Chinese exports.
Iron Ore Fundamentals in Summary
Tariff concerns over Chinese steel have dampened sentiment in iron ore markets. Trump confirmed plans to proceed with his new tariff policy, raising fears of a broader trade war.
Vietnam imposed a temporary anti-dumping levy on Chinese steel products, and South Korea introduced a provisional tariff on Chinese steel imports.
China's PMI data, released on Saturday (1/March), indicated expanding manufacturing activity, with the index rising to 50.2 from 49.1—the first monthly increase since November.
This week, release of trade data from China is likely to provide context around how China’s imports and exports are faring.
China's port IO stockpiles dropped by 1.02 million tons (-0.68%) WoW to 148.16 million tons for the week ending 28/Feb as per MMI data .
Based on seasonality, SGX IO Futures Mar contract trades 19.5% below its last 5-year average (USD 127.29/ton).
Short-Term MA Signal Imminent Decline Following Tariff Concerns
The 9-day and 21-day DMAs are nearing a bearish crossover after a sharp decline, indicating potential further downside based on short-term moving averages.
Prices Face Resistance at Long-term Moving Average Convergence
Iron ore prices have dropped below their 100-day and 200-day moving averages, which now act as support levels. A stronger catalyst may be needed for a decisive break lower. Meanwhile, resistance is forming as these long-term averages converge.
MACD Signals Strong Bearish Momentum. RSI Falls Sharply, Nearing Oversold
The MACD indicates that prices are in a sharp downtrend, with the 12-day and 26-day moving averages continuing to diverge, suggesting further downside potential. The RSI, currently at 36.88, also reflects the downtrend but remains above the oversold threshold.
Volatility Rises From Lows, IO Prices Above 61.8% Fibonacci As Rally Loses Steam
Volatility rose over the past week continuing its broader increase since bottom on 31/Jan but levels still remain near multi-year lows. With the 2025 rally losing steam, prices have retraced by 6.9% from their peak. They trade just above the 61.8% Fibonacci level which could provide support.
Buying Pressure Softens & IO Prices Below Lower Bollinger Band
Buying pressure weakened during the week, as reflected in the Accumulation/Distribution indicator. Bollinger Bands widened sharply after narrowing in the latter half of February, with prices now trading below the lower band.
China’s Two Sessions: A Key Catalyst for Iron Ore Market Swings?
China's Two Sessions (Lianghui) is an annual political gathering in China where key economic and industrial policies are set. This can significantly impact China linked assets including iron ore. Over the past four years (2021-2024), prices have shown a pattern of pre-meeting speculation-driven gains, followed by declines due to policy interventions or cautious economic targets. While 2021 and 2022 saw initial optimism fueling price spikes before corrections, 2023 and 2024 featured steady declines amid weak demand and rising inventories. This trend underscores China's policy direction as a key driver of iron ore market fluctuations.
Source: TradingView Data and Mint Finance Analysis
IO Futures Only Aggregate Exposure
Financial Institutions (FIs) and Managed Money participants are net long with 74.8k lots and 130.8k across all futures expiries. Physicals participants and Others are net short with 158.1k and 47.5k lots respectively across all futures expires. Managed Money increased net long positions, Physicals increased net short positions while FIs decreased net long positions last week. Overall futures open interest was 1,224,213 lots as of 21/Feb (+11.2%) while it was 1,101,024 lots as of 14/Feb.
Source: SGX
IO Futures & Options Aggregate Exposure
Financial Institutions (FIs) and Managed Money participants are net long with 78.9k lots and 146.4k across all futures and options expiries. Physicals participants and Others are net short with 171.1k and 54.2k lots respectively across all futures and options expires. Managed Money increased net long positions, Physicals increased net short positions while FIs decreased net long positions. Overall futures and options open interest was 1,525,430 lots as of 21/Feb (+11.3%) while it was 1,370,376 lots as of 14/Feb.
Source: SGX
Historical Futures Aggregate Exposure by Market Participants
Physical participants have switched from net long to net short over the past month. Managed Money participants have switched from net short to being net long in the last two weeks. Financial Institutions continue to hold net long positions since the second quarter of last year.
Source: SGX Data and Mint Finance Analysis
Hypothetical Trade Setup
Iron ore prices have fallen amid concerns over Chinese steel exports. U.S. trade tariffs are expected to affect a USD 7 billion Chinese steel market, while other countries are also imposing levies and charges, adding pressure on demand. Weaker steel demand could dampen iron ore consumption, potentially slowing China's iron ore imports.
Prices are down 6%, with multiple indicators pointing to strong bearish sentiment. However, the upcoming Two Sessions meeting could trigger a recovery if a stimulus plan is announced to support the struggling steel sector. Additionally, prices are hovering around a long-term moving average, which may act as support. Given these factors, further downside could be limited. A closer target for a short position may be more prudent, while a potential higher open could offer a better entry level.
This paper posits a short position in SGX Iron Ore Futures expiring on 30th April 2025 (FEFJ2025) with an entry level of USD 102.95/ton combined with a take profit level of USD 99.75/ton and a stop-loss at USD 106.15/ton resulting in a reward-to-risk ratio of 1x.
DISCLAIMER
This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services.
Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
IO Weekly Technicals Review [2025/08]: IO Prices Extend UptrendSGX TSI Iron Ore CFR China (62% Fe Fines) Index Futures (“SGX IO Futures”) rose last week, closing USD 1.30/ton higher by 21/Feb (Fri).
SGX IO Futures opened at USD 105.95/ton on 17/Feb (Mon) and closed at USD 107.25/ton on 21/Feb (Fri).
Prices briefly touched a weekly high of USD 109.30/ton on 21/Feb (Fri) and a low of USD 104.20/ton on 17/Feb (Mon). It traded in a range of USD 5.10/ton during the week, which was wider than the prior week.
Prices crossed the pivot point of USD 106.85/ton and R1 point of USD 108.10/ton during the week, closing between the R1 point and the pivot point at USD 107.25/ton.
Volume peaked on 20/Feb (Thu) as investor sentiment improved amid signs of recovery in China’s property sector.
Iron Ore Fundamentals in Summary
Prices climbed to their highest levels in more than four months as steel consumption recovery signs brightened demand outlook in top consumer China, where stimulus hopes have revived.
Prices also surged as supply tightened after an Australian cyclone Zelia likely disrupted seven million tons of shipments.
BHP and Rio Tinto reported weaker earnings due to falling iron ore prices but emphasized their strong position in the energy transition, particularly through copper assets. While the recent price rally provides temporary relief for major miners like Rio Tinto, BHP, Fortescue, and Vale, they face significant short- and long-term risks.
China's port IO stockpiles dropped by 0.78 million tons (-0.52%) WoW to 149.18 million tons for the week ending 21/Feb as per MMI data.
Based on seasonality, SGX IO Futures Mar contract trades 16.33% below its last 5-year average (USD 129.66/ton).
Short-Term MA Sustains Bullishness amid Strong Industrial Outlook
Formation of a golden cross on 17/ Jan (Fri) triggered a rally in iron ore with prices rising 5.2% over three weeks before losing steam on 14/Feb. Following tentative signs of China's property sector recovery, iron ore prices regained upward momentum this week.
Prices Trend Upwards Amid Potential Long-term Moving Average Convergence
IO prices are trading well above 100-day & 200-day DMAs. The narrowing gap between the long-term moving averages suggests a high possibility of convergence which could further confirm the uptrend. Will prices revert towards longer-term averages or sustain their upward trajectory?
MACD Signals Weakening Bullish Momentum, RSI Cross Portends Bears Ahead
The MACD line is near the signal line suggesting weakening momentum of the bullish trend. Meanwhile, the RSI is at 57.59, at neutral levels as it hovers around the midpoint, with its RSI-based moving average at 59.65. RSI MA forming a death-cross portends bearishness ahead.
Volatility Steady & IO Prices Closed Below 61.8% Fibonacci Level Amid Uptrend
Volatility remained steady this week. Prices traded between the 61.8% Fibonacci level (USD 107.65/ton) and the 50% level (USD 105.40/ton), closing below the 61.8% Fibonacci level. Going forward, 61.8% Fibonacci level (USD 107.65/ton) may act as resistance, with 50.0% Fibonacci level (USD 105.40/ton) as support.
Buying Pressure Softened & IO Prices Trade Below Upper Bollinger Band Levels
Buying pressure softened during second half of last week based on A/D indicator. IO prices climbed from the basis band to the upper band during the week and closed within the range at USD 107.25.
China’s Two Sessions: A Key Catalyst for Iron Ore Market Swings?
China's Two Sessions (Lianghui) is an annual political gathering in China where key economic and industrial policies are set. This can significantly impact China linked assets including iron ore. Over the past four years (2021-2024), prices have shown a pattern of pre-meeting speculation-driven gains, followed by declines due to policy interventions or cautious economic targets. While 2021 and 2022 saw initial optimism fueling price spikes before corrections, 2023 and 2024 featured steady declines amid weak demand and rising inventories. This trend underscores China's policy direction as a key driver of iron ore market fluctuations.
Source: SGX
IO Futures Only Aggregate Exposure
Financial Institutions (FIs) and Managed Money participants are net long with 101.6k lots and 81.4k across all futures expiries. Physicals participants and Others are net short with 142.7k and 40.3k lots respectively across all futures expires. Managed Money increased net long positions, Physicals increased net short positions while FIs decreased net long positions last week. Overall futures open interest was 1,101,024 lots as of 14/Feb, while it was 984,935 lots as of 07/Feb.
Source: SGX
IO Futures & Options Aggregate Exposure
Financial Institutions (FIs) and Managed Money participants are net long with 102.3k lots and 90.9k across all futures and options expiries. Physicals participants and Others are net short with 145.8k and 47.4k lots respectively across all futures and options expires. Managed Money increased net long positions, Physicals increased net short positions while FIs decreased net long positions last week. Overall futures and options open interest was 1,370,376 lots as of 14/Feb, while it was 1,234,295 lots as of 07/Feb.
Source: SGX
Historical Futures Aggregate Exposure by Market Participants
Physical participants have switched from net long to net short over the past month. Managed Money participants have switched from net short to being net long in the last two weeks. Financial Institutions continue to hold net long positions since the second quarter of last year.
Source: SGX
Hypothetical Trade Setup
IO prices surged to a four-month high, driven by a brighter China steel demand outlook amid renewed stimulus hopes. This mirrors past trends where economic support hopes drove pre-session gains in 2021 & 2022. Current rally signals renewed optimism of stronger policy support from Two Sessions.
IO prices sustained uptrend last week save a pull back on Friday T+1 session. The MACD signals weakening bullishness while the RSI MA formed a death-cross portending bearishness ahead. IO prices rose from above 50% Fibonacci levels to close marginally below 61.8% levels indicating signaling bullishness.
Against this backdrop, this paper posits a long position in SGX Iron Ore Futures expiring on 28th March 2025 (FEFH2025) with an entry at USD 106.20/ton combined with a take profit level at USD 111.60/ton and a stop-loss at USD 101.70/ton resulting in a reward-to-risk ratio of 1.2x.
DISCLAIMER
This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services.
Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
IO Weekly Technicals Review [2025/07]: IO Losing Upward SteamSGX TSI Iron Ore CFR China (62% Fe Fines) Index Futures (“SGX IO Futures”) dipped last week, closing USD 1.05/ton lower by 14/Feb (Fri).
SGX IO Futures opened at USD 106.05/ton on 10/Feb (Mon) and closed at USD 105.0/ton on 14/Feb (Fri).
Prices briefly touched a weekly high of USD 108.80/ton on 14/Feb (Fri) and a low of USD 104.20/ton on 14/Feb (Fri). It traded in a range of USD 4.60/ton during the week, which was narrower than the prior week.
Prices traded between the pivot point of USD 105.05/ton and R1 point of USD 108.05/ton throughout the week, closing below the pivot point of USD 105.05/ton.
Volume peaked on 14/Feb (Fri) as Cyclone Zelia disrupted mining operations, spiking iron ore prices amid uncertainty.
Iron Ore Fundamentals in Summary
China’s record-high new credit in January signals mixed trends. Early fiscal support and a rise in long-term corporate loans hint at recovering business demand. It is unclear if this growth is sustainable or temporary with banks front loading loans ahead of Lunar New Year.
Mortgage loans fell after three months of gains, raising concerns about slowing home sales.
Western Australia’s iron ore hub was hit by Category 5 Cyclone Zelia, the strongest since 2007 halting major mines and ports like Port Hedland. Strong winds and heavy rains disrupted operations impacting mining giants BHP, Rio Tinto, and Fortescue. Dampier and Varanus Island ports reopened on Friday after inspections of navigation aids, channels and berths. The port authority confirmed resumption of safe operations.
China's port IO stockpiles rose by 0.05 million tons (+0.03%) WoW to 149.96 million tons for the week ending 14/Feb per MMI data.
Based on seasonality, SGX IO Futures Mar contract trades 17.9% below its last 5-year average (USD 129.33/ton).
IO Prices Plunging Below Short-Term Moving Averages Signal Bearishness
Formation of a golden cross on 17/ Jan (Fri) triggered a rally in iron ore with prices rising 5.2% over three weeks before losing steam on Friday. Prices plunged sharply below both the 9-day (USD 106.07/ton) & 21-day (USD 105.22/ton) moving averages on 14/Feb (Fri).
Will IO Prices Revert to its Long-Term Averages?
IO prices are trading above 100-day & 200-day DMAs. Prices show signs of reversion towards the longer-term moving averages following corrections on Friday. Will IO prices tend towards the longer-term average?
MACD Signals Bearish Trend Emergence, RSI Cross Portends Bears Ahead
The MACD indicator converged with the signal line this week indicating weakening of bullish trend. Meanwhile, the RSI is at 59.98, at neutral levels as it hovers above the midpoint, with its RSI-based moving average at 52.13. RSI MA forming a death-cross portends bearishness ahead.
Volatility Rose & Prices Closed Below 50% Fibonacci Level Fueling Bearishness
Volatility inched higher late in the week. Prices traded between the 61.8% Fibonacci level (USD 107.62/ton) and the 50% level (USD 105.36/ton), closing below the 50.0% Fibonacci level. Going forward, 50 Fibonacci level (USD 105.36/ton) may act as resistance, with 38.2% Fibonacci level (USD 103.1/ton) as support.
Buying Pressure Softened & IO Prices Trade Below Bollinger Band Basis Levels
Buying pressure softened during second half of last week based on A/D indicator. Having tested the ceiling of the Bollinger band, IO prices witnessed sharp correction to close below the Bollinger Band basis price level of USD 105.30/ton.
IO Prices Rose Towards CNY & Spiked Even Higher Due to Cyclone Zelia
Iron ore prices typically rise in the period leading up to the Chinese New Year due to increased demand, followed by a sharp decline post-holiday as industrial activity slows. This pattern is consistent across multiple years but in 2025, iron ore prices followed the usual trend of rising before the Chinese New Year but remained stable afterward, unlike previous years' sharp post-holiday declines.
Source: SGX
IO Futures Only Aggregate Exposure
Financial Institutions (FIs) and Managed Money participants are net long with 115.4k lots and 35.7k across all futures expiries. Physicals participants and Others are net short with 116.9k and 34.2k lots respectively across all futures expires. Managed Money switched from net short to net long positions, Physicals increased net short positions while FIs decreased net long positions last week. Overall futures open interest was 984,935 lots as of 07/Feb (-16.5%) while it was 1,179,418 lots as of 31/Jan.
Source: SGX
IO Futures & Options Aggregate Exposure
Financial Institutions (FIs) and Managed Money participants are net long with 116.3k lots and 44.8k across all futures and options expiries. Physicals participants and Others are net short with 122.1k and 39.0k lots respectively across all futures and options expires. Managed Money switched from net short to net long positions, Physicals increased net short positions while FIs decreased net long positions last week. Overall futures and options open interest was 1,234,295 lots as of 07/Feb(-13.2%) while it was 1,421,263 lots as of 31/Jan.
Source: SGX
Historical Futures Aggregate Exposure by Market Participants
Physical participants have switched from net long to net short over the last three weeks. Managed Money participants have switched from net short to being net long. Financial Institutions continue to hold net long positions since the second quarter of last year.
Source: SGX
Hypothetical Trade Setup
Western Australia’s was hit by Cyclone Zelia halting major mines and ports. Strong winds and rains disrupted operations. Prices rallied. But on Friday, port authority confirmed resumption of safe operations. Temporary tail winds supporting IO has now faded.
IO prices plunged sharply below short-term both moving averages on Fri and risks inching towards longer term moving averages. The MACD indicator indicates weakening bullishness. while RSI MA cross formed a death-cross portending bearishness ahead. IO prices closed below 50% Fibonacci levels signaling weakness.
Against this backdrop, this paper posits a short position in SGX Iron Ore Futures expiring 28th March 2025 (FEFH2025) with an entry at USD 105.30 combined with a take profit level at USD 100.80 and a stop-loss at USD 108 resulting in a reward-to-risk ratio of 1.67x.
DISCLAIMER
This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services.
Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
IO Weekly Technicals Review [2025/06]: Correction Looms SGX TSI Iron Ore CFR China (62% Fe Fines) Index Futures (“SGX IO Futures”) rose last week, closing USD 2.25/ton higher by 07/Feb (Fri).
SGX IO Futures opened at USD 105.05/ton on 03/Feb (Mon) and closed at USD 107.30/ton on 07/Feb (Fri).
Prices briefly touched a weekly high of USD 107.50/ton on 07/Feb (Fri) and a low of USD 102.00/ton on 03/Feb (Mon). It traded in a range of USD 5.50/ton during the week, which was wider than the prior week.
Prices traded between the pivot point of USD 105.35 and S1 point of 103.85 throughout the week, crossing the R1 point of USD 107.20/ton on Fri and closing above it.
Volume peaked on 07/Jan (Fri) with volume increasing significantly compared to the previous week levels.
Iron Ore Fundamentals in Summary
Dalian iron ore futures reached a four-month high, posting strong weekly gains. The recovery was driven by steel mills resuming production, increased activity in the property sector, and rising Chinese equities after the Lunar New Year.
China filed a WTO complaint against new U.S. tariffs and urged dialogue. While trade tensions remain a concern, steel-related commodities continued to rise, with steelmaking ingredients and Shanghai Futures Exchange benchmarks posting strong gains.
Iron ore futures rebounded as a softer U.S. dollar (-0.4%) made commodities more affordable for global buyers. Additionally, Rio Tinto cleared ships from Western Australian ports due to cyclone threats, adding a risk premium to prices.
China's port IO stockpiles rose by 4.63 million tons (+3.19%) WoW to 149.91 million tons for the week ending 07/Feb per MMI data.
Based on seasonality, SGX IO Futures Mar contract trades 17.3% below its last 5-year average (USD 125.16/ton).
Short-Term Moving Averages Signal Bullish Trend, But Correction Looms
Formation of a golden cross on 17/ Jan (Fri) followed by upward trend for three weeks indicating that the bullishness may sustain in the near term. Prices are trading above both the short-term moving averages.
Long-Term Averages Indicate Convergence of Moving Averages
IO prices crossed and closed significantly above the 200-day DMA. Signaling a strengthening bullish trend as prices beats the 200-day DMA, with a probability of convergence between long-term moving averages.
MACD Signals Bullish Momentum; RSI Inching Towards Overbought Zone
The MACD signals a positive momentum starting from 14/Jan with growing bullishness observed last week. Meanwhile, the RSI is at 65.08, is inching towards the overbought zone and it hovers above the midpoint, with its RSI-based moving average at 60.97.
Volatility Rose, Price Closed Above 50% Fibonacci Level
Volatility gained upward momentum late in the week. Prices traded between the 38.2% Fibonacci level (USD 103.10/ton) and the 61.8% level (USD 107.62/ton), closing below the 61.8% Fibonacci level. Going forward, 61.8% Fibonacci level (USD 107.62/ton) may act as resistance, with 50.0% Fibonacci level (USD 105.36/ton) as support.
Buying Pressure Intensified, Price Trading Near the Upper-Bollinger Bands
Buying pressure has intensified in the later part of the week according to the Accumulation/Distribution (A/D) indicator. The price is trading between the upper-volume node and basis-volume node, closing the week near the upper-volume node.
IO Prices Rise Towards CNY & Then Decline Thereafter
Between 2021 & 2024, SGX IO futures prices have risen leading up to the Chinese New Year before tapering off ten trading days after the holiday. Prices declined before & after CNY holidays only in 2024 while prices continued to rise even after CNY before falling sharply in 2021 & 2022.
A similar trend was observed in the ten-day period leading up to CNY 2025.
IO Futures Only Aggregate Exposure
Financial Institutions (FIs) are net long with 136.6k lots across all futures expiries. Managed Money participants, Physicals participants and Others are net short with 15.5k, 103.5k and 17.3k lots respectively across all futures expires. Managed Money decreased net short positions, Physicals increased net short positions while FIs decreased net long positions last week. Overall futures open interest was 1,179,418 lots as of 31/Jan stood at lots (-3.5%) while it was 1,222,981 lots as of 24/Jan.
Source: SGX
IO Futures & Options Aggregate Exposure
Financial Institutions (FIs) are net long with 133.2k lots across all futures & options expiries. Managed Money participants, Physicals participants and Others are net short with 7.0k, 106.9k and 19.2k lots respectively across all futures and options expires. Managed Money decreased net short positions, Physicals increased net short positions while FIs decreased net long positions last week. Overall futures and options open interest was 1,421,263 as of 31/Jan stood at lots (-5.2%) while it was 1,499,318 lots as of 24/Jan.
Source: SGX
Historical Futures Aggregate Exposure by Market Participants
Physical participants have switched from net long to net short over the last three weeks. Managed Money participants have maintained net short positions for the past month. Financial Institutions continue to hold net long positions since the second quarter of this year.
Source: SGX
Hypothetical Trade Setup
Prices are currently trading above short-term moving averages and significantly above both long-term moving averages, hovering near the upper Bollinger Band, which suggests potential resistance at these levels. Historical trends indicate a pattern of price declines in the last three days of the 10-day period following the Chinese Lunar New Year, a movement that could potentially repeat this year. While managed money participants have reduced their short positions over the past two weeks, signaling a more optimistic outlook, we take a contrarian view and recommend a short position strategy this week, anticipating a potential price correction from current levels.
The hypothetical trade setup involves entering a short position at USD 107.6/ton with a take profit level at USD 104.3/ton combined with a stop loss at USD 109.0/ton resulting in a 2.35x reward-to-risk ratio.
DISCLAIMER
This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services.
Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
Is SGX Iron Ore Poised for Another Leg Higher?After rallying from the January 7 swing low, iron ore has spent the past week consolidating, forming what looks like a bullish pennant.
While price action above the 200-day moving average has been shaky over the past year, traders should watch for a potential topside break in thin Lunar New Year conditions. A break and close above $105.35 could open the door to $107.30, the December 10 swing high. Clearing that may put $108 in focus, with a move beyond strengthening the case for a run towards $114 resistance.
RSI (14) has diverged slightly from price, but the bearish signal is offset by the continued uptrend in MACD.
Good luck!
DS
IO Weekly Technicals Review [2025/04]: Bullish Trend Pre-CNYSGX TSI Iron Ore CFR China (62% Fe Fines) Index Futures (“SGX IO Futures”) rose last week, closing USD 1.05/ton higher by 24/Jan (Fri).
SGX IO Futures opened at USD 103.70/ton on 20/Jan (Mon) and closed at USD 104.75/ton on 24/Jan (Fri).
Prices briefly touched a weekly high of USD 105.35/ton on 21/Jan (Tue) and a low of USD 102.85/ton on 20/Jan (Mon). It traded in a range of USD 2.50/ton during the week, which was narrower than the prior week.
Prices traded between the pivot point of USD 101.85 and R1 point of 106.35 throughout the week.
Volume peaked on 21/Jan (Tue), as prices traded within the range in the week leading up to Chinese New Year.
Iron Ore Fundamentals in Summary
Dalian iron ore futures saw early gains on China’s stimulus and easing Sino-U.S. tensions but fluctuated midweek on U.S. tariff threats, closing slightly higher as falling port inventories and a weaker dollar provided support.
Mixed steel prices reflected short-term boosts from rising hot metal output and policy support, offset by lingering property sector woes, trade uncertainties, and structural market challenges.
Port Hedland reopened after a cyclone, easing supply concerns, while Fortescue and ASX:BHP reported stable iron ore output despite operational challenges, contributing to steady market sentiment.
China's port IO stockpiles dropped by 1.35 million tons (-0.92%) WoW to 145.28 million tons for the week ending 24/Jan per MMI data .
With implied volatility at multi-year lows, the market signals limited expectations for significant price moves after a strong 2025 showing.
Based on seasonality, SGX IO Futures Jan contract trades 18.6% below its last 5-year average (USD 128.93/ton).
Short-Term Moving Averages Indicate Strengthening of Bullish Trend
Formation of a golden cross on 17/Jan (Fri) followed by upward trend this week indicate that the bullishness may sustain in the near term.
Prices hit a significant high the previous week before consolidating at elevated levels.
Long-Term Averages Signals Possible Consolidation Near 200-day MA
IO prices consolidated near the 200-day MA and closed slightly above the 200-day MA. This indicates the strengthening of the bullish trend as prices near the 200-day MA, with prices may consolidate at this level or show signs of a correction next week.
MACD Signals Bullish Momentum; RSI Inching Towards Overbought Zone
The MACD signals a positive momentum starting from 14/Jan. Meanwhile, the RSI is at 64.67 inching towards the overbought zone and hovering above the midpoint. Its RSI-based moving average is at 54.02.
Volatility Steady, Price Closed Above 38.2% Fibonacci Level
Volatility remained steady throughout the week. Prices traded between the resistance levels of 38.2% Fibonacci level (USD 103.15/ton) and the 50.0% Fibonacci level (USD 105.40/ton) during the week. Going forward, the 50.0% Fibonacci level at USD 105.40/ton will act as resistance while the 38.2% level at USD 103.15/ton will act as the support.
Buying Pressure Intensified, Price Trading Near the High-Volume Nodes
Buying pressure has grown stronger from the start of this week according to the Accumulation/Distribution (A/D) indicator. The price is trading near the high-volume node. Price closed the week near the Upper Bollinger Band.
IO Prices Rise Towards CNY & Then Decline Thereafter
Between 2021 & 2024, SGX IO futures prices have risen leading up to the Chinese New Year before tapering off ten trading days after the holiday. Prices declined before & after CNY holidays only in 2024 while prices continued to rise even after CNY before falling sharply in 2021 & 2022.
A similar trend is observed in the first seven days of the ten-day period leading up to CNY 2025.
IO Futures Only Aggregate Exposure
Financial Institutions (FIIs) are net long with 157.1k lots across all futures expiries. Managed Money participants, Physicals participants and Others are net short with 134.7k, 5.1k and 17.2k lots respectively across all futures expires.
Managed Money decreased net short positions last week, while FIIs decreased net long positions. Overall futures open interest as of 17/Jan stood at 1,213,572 lots (9.6%), while it was 1,107,236 lots as of 10/Jan.
Source: SGX
IO Futures & Options Aggregate Exposure
Financial Institutions (FIIs) are net long with 152.9k lots across all futures & options expiries. Managed Money participants, Physicals participants and Others are net short with 129.1k, 5.1k and 18.6k lots respectively across all futures and options expires.
Managed Money decreased net short positions last week, while FIIs decreased net long positions. Overall futures and options open interest as of 17/Jan stood at 1,484,889 lots (8.2%), while it was 1,372,286 lots as of 10/Jan.
Source: SGX
Historical Futures Aggregate Exposure by Market Participants
Physical participants have switched from net long to net short over the last week. Managed Money transitioned from net long to net short positions over the last month, signaling a notable shift in market sentiment. Financial Institutions continue to hold net long positions since the second quarter of this year.
Source: SGX
Hypothetical Trade Setup
Optimism around China's improving narrative in the lead-up to CNY has bolstered sentiment. Iron ore prices have climbed sharply, buoyed by a brighter outlook on recent stimulus measures.
Technical indicators present mixed signals, with bullish signs such as a golden cross formation in short-term moving averages and prices trading near the upper Bollinger Band, alongside consolidation signals like RSI inching towards the overbought zone and prices nearing long-term moving averages. Amid this backdrop, a Bullish Call Spread enables portfolio managers and traders to participate in potential further upside while limiting the downside risk of a price pullback.
A bullish call spread involves buying a lower strike call option (105 Call paying a premium of USD 3.48/ton) and selling a higher strike call option (108 Call collecting a premium of USD 2.32/ton). The position provides a maximum profit of USD 284/lot, a maximum loss of USD 116/lot delivering a 2.45x reward-to-risk ratio with a breakeven at USD 106.16/ton. These calculations are based on SGX IO option premiums as of close of markets on 24th January 2025.
DISCLAIMER
This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services.
Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
IO Weekly Technicals Review [2025/03]: Uptrend to PersistSGX TSI Iron Ore CFR China (62% Fe Fines) Index Futures (“SGX IO Futures”) rose last week, closing USD 6.75/ton higher by 17/Jan (Fri).
SGX IO Futures opened at USD 97.40/ton on 13/Jan (Mon) and closed at USD 104.15/ton on 17/Jan (Fri).
Prices briefly touched a weekly high of USD 104.20/ton on 17/Jan (Fri) and a low of USD 97.40/ton on 13/Jan (Mon). It traded in a range of USD 6.80/ton during the week, which was wider than the prior week.
Prices opened near the pivot point of USD 97.50 and closed above the R4 point of USD 104.05 at the end of the week.
Volume peaked on 17/Jan (Fri), as prices hit new highs due to China’s stronger-than-expected economic recovery.
Iron Ore Fundamentals in Summary
IO prices began the week on an uptrend as IO prices rose in early Asian trade, driven by strong Chinese trade data, robust iron ore imports, and optimism around China's stimulus measures and fiscal strength.
Despite the week's rally, economists caution that the rise is sentiment-driven rather than fundamental. Falling Chinese steel demand and potential U.S. tariffs on Chinese goods could continue to weigh on raw material prices.
IO prices rose throughout the week as China’s GDP (Q4) edged up 5.0% YoY and Industrial production (Dec) increased by 6.2% YoY.
China's port IO stockpiles grew by 0.3 million tons (0.2%) WoW to 146.63 million tons for the week ending 17/Jan, according to MMI data .
Along with rising port inventories, the Housing prices (Dec) dropped by 5.3% YoY. With implied vols at multi-year lows, expectations for significant near-term movement remain limited after a strong second week of 2025.
Based on seasonality, SGX IO Futures Feb contract trades 19.4% below its last 5-year average (USD 128.93/ton).
Short-Term Moving Averages Shows Bullish Trend Amid Golden Cross Formation
The formation of a golden cross on 17/ Jan (Fri) indicates that the bullish trend may be sustained in the near term. Prices gained upward momentum early this week and continued to rise throughout the week.
Long-Term Averages Signals Possible Consolidation near 200-day MA
IO prices crossed the 100-day MA and closed slightly below the 200-day MA. This indicates the strengthening of the bullish trend as prices near the 200-day MA, with prices consolidating at this level next week.
MACD signals Bullish Momentum but Potential for Consolidation Emerging
The MACD signals a positive momentum starting from 14/Jan. Meanwhile, the RSI is at 63.46, in the overbought zone, and hovers way above the midpoint, with its RSI-based moving average at 45.13.
Volatility Declined; Price Closed Above 38.2% Fibonacci Level
Volatility rose through the week but dipped by the end. Prices broke the resistance levels of 23.6% Fibonacci level (USD 100.35/ton) and the 38.2% Fibonacci level (USD 103.20/ton) during the week. Going forward, the 50.0% Fibonacci level at USD 105.45/ton will act as resistance while the 38.2% level at USD 100.35/ton will act as the support.
Buying Pressure Intensified, Prices Near Mid of High & Low Volume Nodes
Buying pressure has grown stronger from the start of this week according to the Accumulation/Distribution (A/D) indicator. The price is trading near the mid of high & low-volume nodes. Price closed the week near the Upper Bollinger Band.
IO Prices Rise Towards CNY & Then Decline Thereafter
Between 2021 & 2024, SGX IO futures prices have risen leading up to the Chinese New Year before tapering off ten trading days after the holiday. Prices declined before & after the CNY holidays only in 2024 while prices continued to rise even after CNY before falling sharply in 2021 & 2022.
A similar trend is observed in the first three days of the ten days leading up to CNY 2025.
IO Futures Only Aggregate Exposure
Financial Institutions (FIIs) and Physicals participants are net long with 159.5k and 20.3k lots across all futures expiries. Managed Money participants and Others are net short with 166.9k and 12.8k lots respectively across all futures expires. Managed money increased net short positions last week, while FIIs increased their net long positions. Physicals switched from being Net Short to Net Long over the week as of 10th Jan 2025 relative to the previous week. Overall futures open interest as of 10/ Jan stood at 1,107,236 lots (4.1%) while it was 1,063,467 lots as of 03/Jan.
Source: SGX
IO Futures & Options Aggregate Exposure
Financial Institutions (FIIs) and Physicals participants are net long with 154.1k and 24.8k lots across all futures & options expiries. Managed Money participants and Others are net short with 170.9k and 8.1k lots respectively across all futures & options expires. Managed money increased net short positions last week, while FIIs increased their net long positions. Physicals switched from being Net Short to Net Long over the week as of 10th Jan 2025 relative to the previous week. Overall futures & options open interest as of 10/ Jan stood at 1,372,286 lots (+4.4%) while it was 1,314,185 lots as of 03/Jan.
Source: SGX
Historical Futures Aggregate Exposure by Market Participants
Physical participants have switched from net short to net long over the last week. Managed Money transitioned from net long to net short positions in the last three weeks, signaling a notable shift in market sentiment. Financial Institutions continue to hold net long positions since the second quarter of this year.
Source: SGX
Hypothetical Trade Setup
Optimism around China's improving narrative ahead of the Chinese New Year has bolstered sentiment. Iron ore prices have climbed sharply, buoyed by a brighter outlook on recent stimulus measures. As trend-followers drive momentum, medium to longer-term fundamentals will likely take a backseat in the short term. Technical indicators present mixed signals, with bullish signs such as a golden cross formation in short-term moving averages and prices trading near the upper Bollinger Band, alongside consolidation signals like RSI slightly above neutral and prices nearing long-term moving averages.
Against this bullish momentum backdrop, this hypothetical trade setup involves entering a long position at USD 103.5/ton with a take profit level at USD 108.00/ton combined with a stop loss at 100.8/ton resulting in a 1.67x reward-to-risk ratio.
DISCLAIMER
This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services.
Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
Iron Ore: Momentum Builds, 200DMA in SightIron ore futures have seen a decent rally over the past fortnight, rebounding from below $100 a tonne on strong volumes to take out downtrend resistance dating back to early December before going on with the move.
The price is now testing a zone that includes minor horizontal resistance at $102.25 and downtrend established in October when Chinese markets were rollicking along in peak stimulus mode. With momentum indicators firmly with the bulls, traders should be alert for a potential extension of the rally.
If we see the price push above this zone, longs could be established with a stop beneath for protection. The 200-day moving average looms as a potential target with $107.30 the next after that.
Take note of how poorly the price has traded above the 200-day moving average over recent months. As such, if the price action falters around this level again, those seeking the higher target may want to reconsider the merits of the trade.
Good luck!
DS
IO Weekly Technicals Review [2025/02]: Bearish Sentiment SoftensSGX TSI Iron Ore CFR China (62% Fe Fines) Index Futures (“SGX IO Futures”) rose last week, closing USD 0.4/ton higher by 10/Jan (Fri).
SGX IO Futures opened at USD 98.45/ton on 06/Jan (Mon) and closed at USD 98.85/ton on 10/Jan (Fri).
Prices briefly touched a weekly high of USD 99.45/ton on 10/Jan (Fri) and a low of USD 95.9/ton on 07/Jan (Tue). During the week, they traded in a range of USD 3.55/ton, which was narrower than the prior week.
Prices were near the S1 point of USD 96.65/ton throughout the week and closed between the pivot point of USD 99.45/ton and the S1 point of USD 96.65/ton.
Volume peaked on 06/Jan (Mon), as prices were weighed down by slow production of hot metal in China.
Iron Ore Fundamentals in Summary
IO prices pulled back at the start of last week as declining production at Chinese steel mills coincided with rising imports, increasing portside inventories. Production is expected to remain subdued as many mills undergo maintenance ahead of the Chinese New Year.
Nonetheless, IO prices ended the week of 10/Jan moderately higher, supported by China's expanded stimulus measures. Extension of consumer goods trade-in scheme to boost demand has sparked optimism about future iron ore demand.
IO prices remained muted mid-week as China's CPI edged up just 0.1% YoY and stayed flat MoM, highlighting deflationary pressures. China's port IO stockpiles grew by 1.1 million tons (0.8%) WoW to 146.33 million tons for the week ending 10/Jan, according to MMi data .
Rising port inventories and continued RMB depreciation are weighing down on IO prices. With IVs at multi-year lows, market signals limited expectations for significant near-term movement.
Based on seasonality, SGX IO Futures Feb contract trades 24.6% below its last 5-year average (USD 128.93/ton).
Short-Term Moving Averages Indicate Bearish Trend Amid Modest Rebound
Following the formation of a death cross on 20/Dec (Fri), the gap between the 9-day and 21-day moving averages widened over the subsequent weeks, highlighting bearish momentum in the market. Prices gained upward momentum late this week.
Long-Term Averages Signal Strengthening of a Bearish Trend
IO price was below the 100-d SMA throughout the week, closing below it as well. This indicates the strengthening of the bearish trend as prices fell below both the long-term moving averages despite a modest rise.
MACD Signals Weakening Bearishness and Potential Reversal, RSI at Neutral Level
The MACD signals an upward reversal starting from 9/Jan. Meanwhile, the RSI is at 44.80, suggesting a positive momentum and it hovers above the midpoint, with its RSI-based moving average at 39.51.
Volatility Near Multi-Year Low, Price Closed Below 23.6% Fibonacci Level
Volatility remained stagnant. Prices hovered between the 23.6% Fibonacci level at USD 100.25/ton and the 0% Fibonacci level throughout the week. Going forward, the 23.6% Fibonacci level will act as resistance while the 0% level at USD 95.8/ton will act as the support.
Selling Pressure Intensified, Price Still Trading at Low Volume Nodes
Selling pressure continues to dominate and grew stronger by the end of the week according to the Accumulation/Distribution (A/D) indicator. The price is trading at a relatively low-volume node. Price closed the week near the midpoint of the Bollinger Band.
IO Price Sways Wildly Before and After Chinese New Year Break
IO prices have generally risen in the lead-up to Chinese New Year, largely due to stockpiling activity by Chinese steel mills ahead of the holiday season. However, post-CNY performance is more varied, potentially influenced by factors like post-holiday demand and inventory levels.
IO Prices Rise Towards CNY & Then Decline Thereafter
Between 2021 and 2024, SGX IO futures prices have risen leading up to the Chinese New Year before tapering off ten trading days after the holiday. Only in 2024 did the price decline before & after CNY holidays. In 2021 & 2022, prices continued to rise even after CNY before falling sharply.
IO Prices Rise Towards CNY & Then Decline Thereafter (2)
Over the last four years, IO futures prices have gained nearly 3% in the ten trading days leading up to CNY. In the 10 days after, IO prices rise another 4.4% over the next 5 trading days before shedding 5% over the next 5 trading days. Interestingly, price moves have been mostly within 1x standard deviation.
IO Futures Only Aggregate Exposure
Financial Institutions (FIIs) are net long with 143.4k lots across all futures and options expiries. Managed Money, Physical market participants, and Others are net short with 106.8k, 20.6k and 16.0k lots respectively across all futures expiries. Managed money increased net short positions last week, while physicals decreased net short positions. Overall futures & options open interest as of 03/ Jan stood at 1,063,467 lots (-19.5% WoW) while it was 1,321,215 lots as of 27/Dec.
Source: SGX
IO Futures & Options Only Aggregate Exposure
Financial Institutions (FIIs) are net long with 137.7k lots across all futures and options expiries. Managed Money, Physical market participants, and Others are net short with 105.9k, 19.2k, and 12.5k lots respectively across all futures and option expiries. Managed money increased net short positions last week, while physicals decreased net short positions. Overall futures & options open interest as of 03/ Jan stood at 1,314,185 lots (-19% WoW) while it was 1,622,836 lots as of 27/Dec.
Source: SGX
Historical Futures Aggregate Exposure by Market Participants
Physical participants have switched from net long to net short over the last quarter. Managed Money transitioned from net long to net short positions in the last two weeks, signaling a notable shift in market sentiment. Financial Institutions continue to hold net long positions since the second quarter of this year.
Source: SGX
Hypothetical Trade Setup
IO prices faced pressure from rising imports, a weakened yuan, & weaker domestic steel demand. However, China's stimulus measures & the consumer trade-in scheme aimed at boosting consumption provide support, showing positive signs for recovery. Additionally, technical indicators signal weakening bearishness and a potential reversal. A bullish call spread is a tactical alternative to express this view.
While IVs are at multi-year lows, upcoming macro data from China could drive it higher. This includes the PBoC loan prime rate, housing prices, fixed asset investment, and industrial production. However, the risk of disappointing economic figures from China remains a concern.
Investors might adopt a cautious bullish stance through a bullish call spread using SGX IO Options. This involves buying a lower-strike call and selling a higher-strike call, providing capped upside and downside at a lower cost than a mere long call. A hypothetical bullish call spread, with a long call at USD 99/ton and a short call at USD 101/ton expiring on 28/Feb, offers a 2x reward-to-risk ratio. The position provides a maximum profit of USD 134/lot, a maximum loss of USD 66/lot, and a breakeven at USD 99.66/ton.
DISCLAIMER
This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services.
Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
IO Weekly Technicals Review [2025/01]: IO Poised for RecoverySGX TSI Iron Ore CFR China (62% Fe Fines) Index Futures (“SGX IO Futures”) fell last week, closing USD 0.35/ton lower by 03/Jan (Fri).
SGX IO Futures opened at USD 99.1/ton on 30/Dec (Mon) and closed at USD 98.75/ton on 03/Jan (Fri).
Prices briefly touched a weekly high of USD 102.25/ton on 01/Jan (Wed) and a low of USD 97.9/ton on 03/Jan (Fri). It traded in a range of USD 4.35/ton during the week, which was wider than the prior week.
Prices tested the weekly R1 point of USD 101.1/ton throughout the week and closed between the pivot point of USD 99.85 and the S1 point of USD 97.65/ton.
Volume spiked on 03/Jan (Fri), as iron ore prices reached their lowest level since 19/Nov.
Iron Ore Fundamentals in Summary
Iron ore prices declined for the week ending 03/Jan, amid signs of rising inventories and weakening demand in China.
Disappointing economic data from China further weighed on demand outlooks. China’s manufacturing PMI declined to 50.1 in December, down from 50.3 in November, and missed analyst expectations of 50.3.
The daily average port pick-up volume of imported ore decreased by 47k tons WoW to 3.08 million tons.
China's port iron ore stockpiles grew by 240k tons (0.2%) WoW to 145.22 million tons in the week ending 03/Jan, according to SMM data .
Based on seasonality, SGX IO Futures Jan contract trades 23.8% below its last 5-year average (USD 128.93/ton).
Short-Term Moving Averages Indicate Strengthening Bearish Trend
Following the formation of a death cross on 20/ Dec (Fri), the gap between the 9-day and 21-day moving averages widened over the subsequent week, highlighting bearish momentum in the market. Further declines are possible if support levels are breached.
Long-Term Averages Signal Persistent Bearish Trend
IO prices tested the 100-d SMA throughout the week, closing below the 100-d SMA by the end of the week. This indicates the strengthening of the bearish trend as prices fell below both the long-term moving averages.
MACD Points to Deepening Bearish Momentum, RSI at Neutral level
The MACD indicates a stronger bearish sentiment starting from 18/Dec and persisting through the current week. Meanwhile, the RSI is at 39.33, suggesting a neutral stance and it hovers slightly below the midpoint, with its RSI-based moving average at 42.39.
Volatility Spiked; Price Closed Below 23.6% Fibonacci Level
Volatility spiked on 03/Jan (Fri) to end the week higher. Prices hovered over the 23.6% Fibonacci level at USD 100.59/ton throughout the week but declined sharply to close below the 23.6% Fibonacci level. Going forward, the 23.6% Fibonacci level will act as resistance while the 0% level at USD 96.09/ton will act as the support.
Selling Pressure Strengthened, Price Closed at Low Volume Nodes
According to the Accumulation/Distribution (A/D) indicator, selling pressure continued to dominate and grew stronger by the end of the week. The price closed the week at a relatively low-volume node and along the lower Bollinger Band.
IO Futures Only Aggregate Exposure
Financial Institutions (FIIs) are net long with 136.2k lots across all futures expiries. Managed Money, Physical market participants and Others are net short with 26.4k, 79.2k and 30.6k lots respectively across all futures expires. Overall futures open interest as of 03/ Jan stood at 1,321,215 lots.
Source: SGX
IO Futures & Options Only Aggregate Exposure
Financial Institutions (FIIs) are net long with 130.6k lots across all futures and options expiries. Managed Money, Physical market participants and Others are net short with 19.6k, 82.1k and 28.9k lots respectively across all futures and option expires. Overall futures & options open interest as of 03/ Jan stood at 1,622,836 lots.
Source: SGX
Historical Futures Aggregate Exposure by Market Participants
Physical participants have switched from net long to net short over the last quarter. Managed Money transitioned from net short to net long positions, despite ending December with a reported net short, signaling a notable shift in market sentiment. Financial Institutions continue to hold net long positions since the second quarter of this year.
Source: SGX
Hypothetical Trade Setup
Iron ore prices face downward pressure due to increasing inventories and subdued demand, primarily driven by weakness in China's steel industry. Technical indicators signal continued bearishness, with prices failing to breach resistance levels and trading below short and long-term moving averages. However, before the Chinese New Year, seasonal stockpiling by steel mills after 01/Jan is expected to provide some support to spot prices.
A long futures position carries downside risk if next week’s CPI and PPI data disappoint. Alternatively, investors can express a bullish view through a bullish call spread using SGX IO options. This involves buying a lower-strike call and selling a higher-strike call, providing capped upside and downside at a lower premium cost than a long call. A hypothetical bullish call spread, with a long call at USD 100/ton and a short call at USD 102/ton expiring on 28/Feb, offers a 1.86x reward-to-risk ratio. The position provides a maximum profit of USD 130/lot, a maximum loss of USD 70/lot, and a breakeven at USD 100.7/ton.
DISCLAIMER
This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services.
Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
IO Weekly Technicals Review [2024/52]: Downtrend to PersistSGX TSI Iron Ore CFR China (62% Fe Fines) Index Futures (“SGX IO Futures”) fell last week, closing USD 1.45/ton lower by 27/Dec (Fri).
SGX IO Futures opened at USD 100.3/ton on 23/Dec (Mon) and closed at USD 98.85/ton on 27/Dec (Fri).
Prices briefly touched a weekly high of USD 102.1/ton on 23/Dec (Mon) and a low of USD 98.65/ton on 27/Dec (Fri). It traded in a range of USD 3.45/ton during the week, which was narrower than the prior week.
Prices were under the pivot point of USD 102.25/ton at the start of the week and closed slightly above the S1 point of USD 97.65/ton.
Volume peaked on 27/Dec (Fri) as IO price touched its weekly low.
Iron Ore Fundamentals in Summary
Iron ore prices posted a weekly decline on 27/Dec (Fri) despite reports of China’s record plan to issue USD 411 billion in treasury bonds in 2025 to stimulate its economy. The news failed to boost market sentiment.
Steel mills in China showed limited interest in winter stockpiling. Given the current profit margins, their focus remains on negotiating lower prices.
China's port iron ore stockpiles fell by 860k tons (0.59% WoW) to 144.99 million tons in the week ending 27/Dec, according to MMI data .
Based on seasonality, SGX IO Futures Jan contract trades 21.6% below its last 5-year average (USD 126.03/ton).
Short-Term Moving Averages Indicate Strengthening Bearish Trend
Following the formation of a death cross on 20/ Dec (Fri), the gap between the 9-day and 21-day moving averages widened last week, signalling a strengthening & continued bearish trend.
Long-Term Averages Signal Potential Beginning of a Bearish Trend
IO prices tested the 100-d SMA throughout the week but fell, closing below the 100-d SMA by the end of the week. This indicates the beginning of a bearish trend as prices fell below both the long-term moving averages.
MACD Points to Deepening Bearish Momentum, RSI at Neutral Level
The MACD indicates a stronger bearish sentiment starting from 18/Dec and persisting through the current week. Meanwhile, the RSI is at 41.78, suggesting a neutral stance and it hovers slightly below the midpoint, with its RSI-based moving average at 46.93.
Volatility Inched Down, Price Closed Below 23.6% Fibonacci Level
Volatility declined moderately last week. Prices hovered over the 23.6% Fibonacci level at USD 100.35/ton throughout the week but declined sharply to close below the 23.6% Fibonacci level.
Going forward, expect the 23.6% Fibonacci level to act as resistance while the 0% level at USD 95.8/ton will act as support.
Selling Pressure Intensified, Price Trading at Low Volume Nodes
Selling pressure continues to dominate and has grown stronger by the end of the current according to the Accumulation/Distribution (A/D) indicator. The price is trading at a relatively low-volume node. Price also closed the week along the lower Bollinger Band.
IO Futures Only Aggregate Exposure
Financial Institutions (FIIs) and Managed money are net long with 130.4k and 8.4k lots across all futures expiries. Physical market participants and Others are net short with 99.3k and 39.4k lots across all futures expires. Overall futures & options open interest as of 27/ Dec stood at 1,311,576 lots.
Source: SGX
IO Futures & Options Aggregate Exposure
Financial Institutions (FIIs) and Managed money are net long with 126.1k and 17.3k lots across all futures expiries. Physical market participants and Others are net short with 105k and 38.4k lots across all futures expires. Overall futures & options open interest as of 27th Dec 2024 stood at 1,617,924 lots.
Source: SGX
Historical Futures Aggregate Exposure by Market Participants
As of 27th Dec 2024, physical participants have switched from net long to net short over the last quarter. Managed Money has shifted from net short to net long. Financial Institutions continue to hold net long positions since the second quarter of this year.
Source: SGX
Hypothetical Trade Setup
The seasonal demand uptrend seems unlikely, with Chinese steel mills showing limited stockpiling activity. Iron ore prices lack near-term catalysts, while technical indicators highlight a strengthening bearish trend as prices stay below both short-term and long-term moving averages. These technical and fundamental factors suggest prices have yet to bottom out.
To convey a bearish outlook with controlled risk, investors could consider an SGX iron ore put spread. This involves purchasing a USD 98/ton put and selling a USD 96/ton put, both expiring on 31/Jan. The strategy offers a reward-to-risk ratio of 1.7x, with a maximum potential profit of USD 127 and a maximum potential loss of USD 73 per 100-ton lot (excluding transaction costs).
DISCLAIMER
This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services.
Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
IO Weekly Technicals Review [2024/51]: Bearish Trend StrengthensSGX TSI Iron Ore CFR China (62% Fe Fines) Index Futures (“SGX IO Futures”) fell last week, closing USD 3.82/ton lower by 20/Dec (Fri).
SGX IO Futures opened at USD 104.45/ton on 16/Dec (Mon) and closed at USD 100.63/ton on 20/Dec (Fri).
Prices briefly touched a weekly high of USD 105.80/ton on 17/Dec (Tue) and a low of USD 99.80/ton on 20/Dec (Fri). It traded in a range of USD 6/ton during the week, which was wider than the prior week.
Prices tested the pivot point of USD 104.60/ton at the start of the week and closed below the S1 point of USD 101.85/ton.
Volume peaked on 19/Dec (Thu), as iron ore prices declined by 0.9%, as the PBoC kept its loan prime rates unchanged.
Iron Ore Fundamentals in Summary
Iron ore prices declined for the week ending 20/Dec, following the PBoC's decision to keep loan prime rates unchanged on 19/Dec.
Earlier optimism over China’s 2025 monetary policy easing plans faded after the rate pause dampened market sentiment.
Australia’s Department of Industry, Science and Resources said in a quarterly outlook that iron ore prices will average USD 80/ton in 2025 and then drop to USD 76/ton in 2026.
With the US dollar touching a two-year high, Iron Ore prices are turning bearish with markets awaiting China’s next move to support its economy.
China's port iron ore stockpiles inched up 0.01% to 145.85 million tons in the week ending 20/Dec, according to MMI data .
Based on seasonality, SGX IO Futures Jan contract traded 18.8% below its last 5-year average (USD 123.99/ton).
Short-Term Moving Averages Indicate Reversal in Bullish Trend
The 9-day moving average crossed the 21-day moving average from above, culminating in a death cross on 20/Dec (Fri). This signals the potential onset of a bearish trend.
Long-Term Averages Signal Potential Beginning of a Bearish Trend
IO prices tested the 200-d SMA at the start of the week but sharply fell, closing below the 100-d SMA by the end of the week. This indicates the beginning of a bearish trend as prices fell below both the long-term moving averages.
MACD Points to Growing Bearishness, RSI Inches Towards Oversold Territory
The MACD indicates a growing bearish sentiment starting from 18/Dec. Meanwhile, the RSI is at 40.60 and is inching towards oversold territory treading below the midpoint, while the RSI-based moving average is at 51.90.
Volatility Inched Down, Price Closed Below 23.6% Fibonacci Level
Volatility declined moderately last week. Prices tested the 50% Fibonacci level at USD 105.4/ton at the start of the week but quickly declined in the week to close below the 23.6% Fibonacci level at USD 100.35/ton. Going forward, the 23.6% Fibonacci level will act as resistance while the 38.2% level at USD 103.15/ton will act as the support.
Selling Pressure Intensified, Price Trading at Low Volume Nodes
Selling pressure continues to dominate and has grown stronger since the start of December, according to the Accumulation/Distribution (A/D) indicator. The price is trading at a relatively low-volume node. Price also closed the week below the lower Bollinger Band.
Iron Ore Prices Likely to Fall in December Despite Seasonality
Iron ore prices generally increase in December due to seasonal patterns that prompt restocking in anticipation of China's Lunar New Year, driven by higher demand for steel production. However, it looks like in December 2024, prices will likely decline.
IO Futures Only Aggregate Exposure
Financial Institutions (FIs) and Managed money are net long with 124.7k and 26.6k lots across all futures expiries. Physical market participants and Others are net short with 110.1k and 41.2k lots across all futures expiries. Overall futures open interest as of 13th Dec 2024 stood at 1,259,936 lots.
Source: SGX
IO Futures & Options Aggregate Exposure
Financial Institutions (FIs) and Managed money are net long with 121.5k and 37.1k lots across all futures & options expiries. Physical market participants and Others are net short with 117.6k and 41k lots across all futures & options expiries. Overall futures & options open interest as of 13th Dec 2024 stood at 1,565,080 lots.
Source: SGX
Historical Futures Aggregate Exposure by Market Participants
Physical participants have switched from net long to net short over the last quarter. Managed Money has shifted from net short to net long. Financial Institutions continue to hold net long positions since the second quarter of this year.
Source: SGX
Hypothetical Trade Setup
Despite expectations of seasonally strong demand ahead of the Lunar New Year, market sentiment for SGX Iron Ore remains bearish. China's sluggish economic recovery suggests a rebound may hinge on monetary policy easing in 2025. Additionally, technical indicators reinforce the bearish outlook, with prices falling below both short- and long-term moving averages. A short position on SGX Iron Ore could be a strategic way to express this view.
We propose a hypothetical trade setup involving selling the SGX Iron Ore January Futures Contract at USD 102/ton, with a stop loss at USD 105/ton and a target price of USD 97/ton, yielding a reward-to-risk ratio of 1.67x. Each contract provides exposure to 100 tons of iron ore, resulting in a potential gain of USD 500/lot ((102 - 97) x 100) against a risk of USD 300/lot. This calculation excludes transaction costs, such as clearing broker and exchange fees. The SGX requires a minimum initial margin of USD 1,188/lot and a maintenance margin of USD 1,080/lot.
DISCLAIMER
This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services.
Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
IO Weekly Technicals Review [2024/50]: Stimulus Rally FizzlesSGX TSI Iron Ore CFR China (62% Fe Fines) Index Futures (“SGX IO Futures”) expiring in Jan 2025 rose last week closing USD 1.95/ton higher by Friday.
SGX IO Futures opened at USD 102.85/ton on 09/Dec (Mon) and closed at USD 104.80/ton on 13/Dec (Fri).
Prices briefly touched a weekly high of USD 107.30/ton on 10/Dec (Tuesday) and a low of USD 102.55/ton on 09/Dec (Mon). It traded in a range of USD 4.75/ton during the week which was wider than the prior week.
Prices tested the R2 pivot point on 10/Dec (Tue) but failed to pass the level. Price maintained support above the R1 pivot point of 104.75 till the end of the week.
Volume peaked on 10/Dec (Tue) driven by the expanded stimulus announcement in China.
SGX Iron Ore Futures Fundamentals in Summary
IO started the week on a positive note with prices rallying 3% on 09/Dec (Mon) driven by news of expanded stimulus expected to arrive from the Central Economic Work Conference in China.
Despite the rally on 09/Dec (Mon), economic releases on the day showed CPI declining 0.6% MoM (-0.4% E and -0.3% P) during November. Annual CPI also decelerated to 0.2% (0.5% E and 0.3% P) suggesting that the economy continues to be plagued by low domestic consumption.
On 13/Dec (Fri), further economic data from China showed new loans decline 47% YoY to 580 billion yuan in November. Although the figure was 16% higher MoM, the annual decline shows low loan demand. Particularly, new housing and housing related loans remain subdued signaling a potential headwind to IO prices.
On 12/Dec (Thu), China officially announced it would increase the budget deficit, issue more debt, and loosen monetary policy to stimulate the economy and maintain a stable economic growth rate. There were also reports that Chinese policymakers were considering allowing the Yuan to weaken next year to combat punitive trade measures expected from the US.
Iron Ore imports to China fell 1.9% MoM in November to 101.862 million tons. The figure remains 3.9% higher YoY with the YTD figure 4.3% higher. Iron ore imports are expected to rebound in December.
Iron Ore portside inventories rose by 820k tons WoW to 146.66 million tons according to data from SMM. The increase was driven by a significant increase in port arrivals which offset a smaller increase in pickup volume. Maintenance may lead to a further buildup next week.
Based on seasonality, SGX IO Futures Jan contract trades 14.6% below its last 5-year average (USD 121.73/ton). Seasonal trends suggest a rally in the coming weeks.
Short-Term Moving Averages Signal Reversal of Bullish Trend
The 9-day moving average headed higher due to the rally at the start of last week. The price decline in the later part of the week led to a reversal as the 9-day MA is now curving downwards and approaching the 21-day moving average.
Long-Term Averages Signal Retest of 200-day MA
Price tested the 200-day moving average once again last week and managed to surpass it for some time before reversing and heading lower once again. Price remains well above the 100-day moving average which may provide support in case of a decline.
MACD Points to Fading Rally
Relative Strength Index (RSI) at 51.67 signals a neutral level. However, RSI has continued to trend lower since it signaled a crossover with its MA late last week. MACD is narrowing from its positive level and is close to marking a bearish crossover between the 12-day and 26-day MA which could signal a period of decline.
Volatility Rebounds from 1Y Low, Fibonacci 50% Signals Resistance
Volatility rebounded from its 1Y low last week to edge slightly higher to 19.19. Though, volatility still remains muted. Last week, prices retested the 50% Fibonacci level at USD 105.4/ton once more which continues to act as resistance.
Chart Signals Flat Top Pattern
The IO futures chart signals a flat top technical pattern with prices having tested the USD 107/ton level multiple times. The lower and of the range shows a widening channel which could suggest a lower low than previously seen in mid-November.
Hypothetical Trade Setup
Iron Ore prices surged early last week but gave up some gains by the end of the week. Prices retested its resistance levels once more but were rejected. Price also significantly lags the seasonal trend suggesting that the end-year seasonal rally may not materialize this year. Last week’s stimulus announcement failed to provide long-lasting momentum to the rally and prices are trending lower once more at the start of the week.
The declining flat top chart pattern suggests that prices could head lower this time around. This provides a favorable entry for a short position in Iron Ore. However, given significant support levels above that, it may be prudent to choose a slightly higher target.
We propose a hypothetical trade set up of selling SGX IO January Futures Contract at USD 105.00/ton with a stop at USD 108/ton and target at USD 100/ton resulting in reward-to-risk ratio of 1.67x. Each lot of SGX IO Futures Contract provides exposure to 100 tons of iron ore. For each lot, the hypothetical trade would result in gain of USD 500/lot ((105 – 100) x 100) while exposing the trade to a loss of USD 300/lot. This calculation excludes transaction costs comprising of clearing broker fees and exchange clearing fees. The SGX requires a minimum initial margin of USD 1,188/lot and a maintenance margin of USD 1,080/lot.
DISCLAIMER
This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services.
Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
IO Weekly Technicals Review [2024/49]: Near Term Bearish Trend
SGX TSI Iron Ore CFR China (62% Fe Fines) Index Futures (“SGX IO Futures”) expiring in Jan 2025 fell last week closing USD 1.85/ton lower by Friday.
SGX IO Futures opened at USD 104.4/ton on 02/Dec (Mon) and closed at USD 102.55/ton on 06/Dec (Fri).
Prices briefly touched a weekly high of USD 105.70/ton on 04/Dec (Wed) and a low of USD 102.25/ton on 06/Dec (Fri). It traded in a range of USD 3.45/ton during the week.
Prices traded above the pivot point for most of the week but did not manage to pass the R1 weekly pivot point of USD 106.05/ton. Price dipped below the pivot point of USD 103.20/ton on 06/Dec (Fri)
Volume peaked on 04/Dec (Wed).
Fundamentals in Summary
Caixin’s China manufacturing PMI rose to 51.5 in November from 50.3 in the prior month, above analyst expectations of a 50.6 reading and the highest reading since June. PMI data has shown a continued recovery in the manufacturing sector over the past 3 months reflecting improved demand following the stimulus announcement.
Caixin China non-manufacturing PMI eased to 51.5 from 52 reflecting a slowdown in the service sector.
This week, traders will be watching for the CPI release for November on 9/Dec (Mon). In October, CPI fell 0.3% MoM and eased to 0.3% YoY, its lowest reading since June reflecting continued struggles in domestic demand.
The annual Central Economic Work Conference is scheduled for 11/Dec (Wed) where leaders are expected to map out economic targets and stimulus plans. Rumors that a higher-than-usual deficit target for 2025 could be set spurred a rally in Chinese stocks last week.
IO China Portside inventories fell by 100k tons to 150.4 million tons in the week ending 6/Nov, extending its decline from the prior week according to data from the CISA. Elevated inventory levels could limit demand for further imports.
SMM expects construction to enter its traditional off-season in December with no new projects scheduled for now. However, several major central government meetings and the year-end housing project delivery remain key events to watch and could catalyze a rally.
Based on seasonality, SGX IO Futures Jan contract trades 13.4% below its last 5-year average (USD 118.94/ton). Seasonal trends suggest a rally in the coming weeks.
Short-Term Moving Averages Signal Fading Bullish Trend
While the 9-day moving average has remained above the 21-day MA since marking a bullish MA crossover on 29/Nov, the price decline in the later part of last week drove price below the 9-day MA and it has started to flatten suggesting the rally may be losing steam. Price trades above the 21-day MA which could serve as a support level.
Long-Term Averages Signal Reversal from 200-day MA
Price tested the 200-day moving average last week but the level acted as resistance with price failing to pass it. Price remains well above the 100-day MA at 100.31. However, if the 21-day MA fails to provide support, this level could be tested next.
MACD Points to Fading Rally
Relative Strength Index (RSI) at 51.04 signals a neutral level. However, the RSI marked a crossover with its MA suggesting the price could face a period of negative returns. MACD is narrowing from its positive level and is close to marking a bearish crossover between the 12-day and 26-day MA which could signal a period of decline.
Volatility Eases to 1Y Low, Fibonacci 50% Signals Resistance
Volatility continued to decline and reached its lowest level in more than a year. Last week, prices retested the 50% Fibonacci level at USD 105.4/ton once more which has previously acted as resistance. With price declining, it could suggest a continuation of the bearish trend following the rejection at the Fibonacci level.
Prices at Top End of Declining Channel
Prices have traded in a declining parallel channel following the stimulus driven rally in late-September. Prices are currently just below the top end of the parallel channel which could represent a favorable entry level for a short position.
Hypothetical Trade Setup
Iron Ore prices reversed the early week gains last week to end the week lower. 12-day and 26-day MA are close to signaling a bearish crossover following the price rejection at the 200-day moving average last week. This could signal a near-term bearish trend. With prices at the top end of a declining channel, this could provide a favorable entry for a short position. However, given the low volatility and the strong support at USD 100/ton, the decline could be smaller than previous weeks.
We propose a hypothetical trade set up of selling SGX IO January Futures Contract at USD 103/ton with a stop at USD 105.5/ton and target at USD 100/ton resulting in reward-to-risk ratio of 1.2x. Each lot of SGX IO Futures Contract provides exposure to 100 tons of iron ore. For each lot, the hypothetical trade would result in gain of USD 300/lot ((103 – 100) x 100) while exposing the trade to a loss of USD 250/lot. This calculation excludes transaction costs comprising of clearing broker fees and exchange clearing fees. The SGX requires a minimum initial margin of USD 1,188/lot and a maintenance margin of USD 1,080/lot.
DISCLAIMER
This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services.
Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
