Bassanese: Iron headed for $25

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From David Bassanese:

If you think the current rout in iron ore prices is bad enough, I have some potentially troubling news for you: by long-run historical standards, prices still appear relatively high.

The implicit assumption from both the Federal Government and commodity analysts in recent years was that “this time is different”. Almost everyone conceded that commodity prices would fall from their stratospheric heights at some stage, but most thought strong underlying demand from China would keep prices much higher than their previous historical average.

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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.