Iron ore collapses

Thursday, 9 July 2015

Here are the iron ore charts for July 8, 2015:

Benchmark Tianjin spot fell 11.3%, or $5.60, to $44.10 a tonne. Qingdao spot fell 10.1%, or $5.01, to $44.59. 12 month swaps are heading for Hell. Dalian bounced nearly 3.5% overnight to be at 364 this morning. Rebar average is horrible. BHP and RIO were flat in London but tanked 4% each in New York.

It’s a margin call on all things tradable in China. Some of the fall is going to be exaggerated therefore and there’ll be a sharp bounce at some point, but the fundamentals see prices much lower anyway so we’re really only talking about an acceleration of what was coming anyway.

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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.