ANZ released an interesting note late yesterday on the prospects for a rebound in the iron ore price in second half. The note is interesting on a couple of fronts. Firstly, there are some mixed messages coming out of the bank about China’s iron ore stockpile. Regular readers will recall a recent video with ANZ staff exposing worryingly large overflows of iron ore at a large Chinese port. However, this note is much more sanguine about the glut. Secondly, there is some good quantitative data in here on the stimulus measures already announced.
I’m not as bullish as the note, though acknowledge the possibility of a rebounding ore price, which we have already seen in muted way:
My reservations are around the effect of a further slide in global growth and what that would do to iron ore despite Chinese stimulus, such as it is. Anyway, worth a read.