Of course speculation is behind the iron ore bounce

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Westpac thinks not:

“This time round the volume is nowhere near the kind of levels driving the price last time,” says Robert Rennie, chief currency strategist at Westpac.

“The demand levels in China have definitely created a supply shock which has boosted the price, that combined with the focus on inter-party discipline and the rationalisation of heavy industry in China bodes well for iron ore.”

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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.