Daily iron ore price update (the bubble inflates)

Wednesday, 19 June 2019

Spot through the roof. Paper tore it off. Steel is still stalled. Rebar inventories for mid-June are now above last year in the first sign that steel mills are over-producing, a warning for steel prices and the bulks bubble:

Dalian’s nutso performance overnight was reflection of the wider risk rally. If the ECB can cut, and the Fed follow, so can the PBOC is the reasoning.

But this is still all about supply. Prices can simply react without fear until Vale brings back the volumes. That is being aided by a sluggish response in Chinese iron ore production, via Westpac:

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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.