Bulk stall = China stall?

Here’s a chart of iron ore spot (white), futures (yellow) and major Chinese steel prices (rebar green and billet purple), as well as China’s GDP (red):

Without putting too fine a point on it, it is fair to say that there is a correlation between iron ore and steel prices and Chinese growth. Anyone describing the current round of Chinese stimulus as a 2009 “mini me” looks pretty wrong right now. There is no evidence of the kind of bulk commodity rockets we saw in 2009. Maybe its too early, but if anything the iron ore/steel complex looks in danger of another roll over.

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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.