Iron ore capitulation begins

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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.

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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.