Here’s a useful contrarian indicator. The ratings agencies always come in too late on bulk commodities:
» Tight iron ore supply fundamentals prompted us to revise our price-sensitivity ranges upward. Several events in Brazil and Australia have contributed to diminished supply of iron ore and we expect this situation to only slowly improve through 2019 and 2020. New price sensitivity ranges (62%Fe China) are $60/MT – $90/MT with a midpoint of $75/MT — versus the previous range of $45-$75/MT.
» Limited, incremental new capacity will be added over the next several years beyond what is ramping up currently. Some miners announced expansions to replace depleting production levels for the ore, used to make steel, while incremental tonnes will be relatively small and most are not likely to start producing in the next 2-3 years.
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