Regular readers will recall that last year I christened the term, “idiocy spreads” to capture the absurd divergence that transpired between firm major miner share prices and weakening underlying commodity prices, especially iron ore. That idiocy has ended for some but not others. Here are the updated miner indexes versus iron ore for the majors:
None of those charts are very healthy! And here’s the idiocy spreads updated:
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FMG is finally looking rational having closed its spread to iron ore completely and now outpacing it. BHP is galloping closed as well, helped along by oil price falls, but has a long way to go still. The outstanding dill now is RIO and I expect its spread to close very dramatically over the next eighteen months.
