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Iron ore chart for May 13, 2016:
Tianjin benchmark was hit hard -1.7% to $53.50. Paper slumped though Dalian recovered 2% overnight. Rebar average keeps falling and appears to have further to retrace. Port stocks gave back 950k tonnes on last week’s big rise which may support the market a little. Steel mill profitability is still very high.
“Most of the Chinese mills like us are prepared for the price drop, as the price had surged to such a high level that it seemed too good to be true, so decline will be unavailable and it is only when,” a procurement official from a Hebei-based privately-owned steel mill said.
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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.