The end of iron ore stocking cycles

Tuesday 17 March 2015

From Morgan Stanley:

Days of inventory is the key measure and is at the lower end of its recent range (or was March 5). But when you’re only restocking five days worth of inventory then the process is over in a few weeks (compare it with past amplitudes which took months).

I suspect at some point days of inventory will take another structural drop but not until it becomes plain that steel demand is also sinking permanently.

Looks like the great iron ore inventory cycles of the past are ancient history.

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.