From Goldman:
Decomposing downside to iron ore in 2H 2016
The ferrous market has been anything but boring in the first half of 2016. Iron ore prices jumped 80% from a December low to an April high, and Chinese steel inventories at record lows have attracted much attention among investors. Iron ore prices rallied 13% during the first three weeks after Brexit, outperforming most other asset classes, despite rising port inventories. In the analysis below, we discuss the implications of low steel inventory, macro trends, and supply and demand balance to iron ore prices in the second half of 2016.
