Big iron celebrates its own destruction

Tuesday, 18 August 2015

Big iron ore is firming today on hopes for a Chinese deal for Fortescue. BHP is up 0.8% and RIO is 0.4%. Forteshai is up 6.5%:

Sadly it falls to MB again to rain on the parade noting that if Fortesjing does a Chinese deal it will not benefit the majors. In fact it will be a long term disaster, ensuring oversupply basically forever (or at least until China inc decides otherwise).

Idiocy spreads are still closing though Forteshao is about to reverse downwards:

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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.