What Happened
Societe Generale analyst Kunal Kundu has flagged that India’s Goods and Services Tax (GST) collections and Index of Industrial Production (IIP) figures are pointing to a soft consumption backdrop in the world’s most populous country. Narrow demand response — meaning fewer categories of goods driving growth — suggests Indian consumer spending is not firing on all cylinders. This is a macro signal, not a direct price move, but it carries real implications for commodity markets and ASX-listed miners.
Key Levels to Watch
For Iron Ore (SGX futures), the market is currently trading near USD $95–$97/tonne. Key support sits at $92/tonne and $88/tonne. Resistance is at $100/tonne and $105/tonne. A sustained break below $92 would signal deteriorating demand from both China and India.
For BHP (ASX: BHP), support is at $43.50 and $42.00, with resistance at $45.80 and $47.20. RIO (ASX: RIO) holds support near $118.00 and $115.50, with resistance at $122.50 and $125.00.
Technical Picture
Iron ore remains in a short-term downtrend, trading below its 50-day moving average. BHP and RIO are both sitting in neutral-to-bearish territory on the daily chart, with RSI readings near 42–45 — not yet oversold, but lacking upside momentum.
What Traders Are Watching
Traders will be monitoring whether iron ore can hold above $92/tonne. A break below that level, combined with further weak Indian demand data, could accelerate selling in BHP and RIO. Conversely, a surprise uptick in Chinese steel output data could offset India’s softness and push iron ore back toward $100/tonne.
Bias — Bearish
Bearish on ASX materials in the near term. With India showing soft domestic consumption and China’s property sector still under pressure, the two largest drivers of iron ore demand are both flashing caution. BHP and RIO face headwinds until demand data improves.
Source: Societe Generale Research — Kunal Kundu, India Macro Commentary