Daily iron ore price update (running out of headroom)

Wednesday, 14 November 2012

Here is the iron ore price table for November 13th:

Given neither steel prices not the 12m wants to budge, it’s worth revisiting the spreads we follow. First between the 12 month swap and spot:

And between rebar and spot:

And then the above chart expressed as a spread percentage:

Now that’s what I call a trend towards mean reversion.

The rally is running out of headroom.

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.