Steel momentum continues, but iron ore supply pressuring prices
Steel mill margins have improved markedly in China, as mills benefit from a number of factors: ongoing demand recovery assisted by seasonality, low steel inventory and a slower production rise than expected have all contributed to continued strength in steel prices. Meanwhile, margins have blown out to highs not seen since May 2015, assisted by a surge in iron ore supply in recent weeks that has pressured iron ore prices lower despite the rise in steel output.
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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.
