Daily iron ore update (takeoff)

Monday 13 October 2014

Here are the iron ore charts for October 13, 2014:

Off we go! Paper ripped but couldn’t keep pace with spot. Port stocks also lent support, down several million tonnes over the past few weeks (though obviously still high). We’re still in backwardation but who cares, man!

This is kind of what I suspected would happen after Golden Week and the Chinese mortgage loosening but I got head-faked by the resumption of selling. Anyways, the question now is how high? There are two ways of looking at it. Iron ore used to behave like this at big bottoms which led to big bounces. Alternatively, this is a short squeeze. Reuters has texture:

The full text of this article is available to MacroBusiness subscribers

$1 for your first month, then:

$24.99 / month

$249 / year

Cancel at any time through our billing provider, Stripe

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.