How low can iron ore limbo?

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That is the question! Yesterday equities powered higher in the afternoon on hopes that the sell-off is over. A couple of charts from Morgan Stanley suggest it could run further yet:

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There is enough iron ore in stock for a few more weeks of destocking. My guess is we bottom in the high 70s and then slowly rebound to $90 into year-end before heading straight back down in 2015…

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.