Daily iron ore price update (divergence)

Tuesday, 4 July 2017

Tianjin benchmark rose 20 cents to $62.80. Paper flew high late yesterday but came off last night. Paper is clearly more excited than physical. This may be a sign that the short squeeze is in trouble. Or not. It’ll end when Banana Man is done and not before. CISA steel output remains huge at 1.86mt but remember that 3-5mt per month of this is transferred from closed induction furnaces. If large mills took the entire market share it would equal 0.13mt per day.

No change to outlook. Short squeeze then down again. Especially so into Q4.

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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.