The AFR’s strange campaign to put the best possible spin on everything mining continues today with the digging up of another iron ore bull:
The spot price of iron ore at its lowest since September 2012 and consensus forecasts are tipping it to go even lower. But one of the most senior portfolio managers at giant US funds manager Fidelity Worldwide Investments is bucking the trend and buying commodity futures for the steel-making ingredient.
Andrew Wells, one of two global co-chief investment officers overseeing $US280 billion ($302 billion) in funds under management for Fidelity Worldwide Investments is tipping a bigger than expected pick-up in US growth that will offset the slower growth in China and soften the impact on the iron ore price of increased production.
…“We expect a stronger than forecast improvement in US GDP growth that will be very supportive for bulk commodity prices,” he said. “Increased stimulus from the Chinese government is another likely factor that could also help buoy iron ore.”
The US is largely irrelevant. All of NAFTA consumes about 9% of global steel versus China’s 46%. China could help if it hit the panic button, of course.
Meanwhile, the iron ore price fall is all investor’s fault, according to Andrew Michelmore, CEO of MMG, at some Newscorp shindig:
“That’s where I expect to see quite large volatility in commodity prices as these are exacerbated and I have to say the investment community looks at it and thinks ‘this is fantastic, I can swing that up and I can swing that down further’ because they rely on turnover. I’m quite cynical about the size of these swings with a very little change in the fundamentals, but that is the market, that is what we are going to get.”
Investors have kept the iron ore price sky high for years through hoarding. Now they’re being flushed out by miner over-production. Meanwhile, brokers remain catatonically positive on iron ore miners.
It’s all just too bizarre!
