Daily iron ore price update (pansy cartel)

The ferrous complex was a bit of a mess on October 20, 2021 as spot firmed, paper jumped but steel was hit:

The newsflow this week has been dominated by the iron ore cartel downgrading its output projections. This is poor mining and even poorer economics but, these days, it’s all about control fraud as current management seeks to maximise its own returns at the expense of long-term shareholder value. Still, it is what it is we need to ask if it is material.

As we know, Chinese steel output is down roughly 275mt tonnes annualised from the May peak. About 120mt of that is EAF. So we’ve lost an annual run rate of roughly 150mt of steel and 250mt of iron ore demand since then.

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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.