And so the inevitable begins. After months of denial and hope, a sudden breaking of the dam for government and sell side analysts alike. From the top, it began with Citi:
Industrial commodities are mostly negative on a YTD basis, the strengthening US$ and ongoing macro concerns over China have impacted the precious metals and bulks, respectively. The exceptions have been aluminum, zinc, palladium, and gold which have seen modest gains…Citi retains a bottom of consensus forecast for iron ore…
Steel demand is seeing only seasonal improvement typical of post-CNY. However, real estate demand remains quite soft…Environmental pressure has risen with the strengthened environmental law, which is forcing steel curtailments and increasing environmental compliance costs.