Texture from Reuters:
China is willing to resolve its trade dispute with the United States through “calm” negotiations and resolutely opposes the escalation of the conflict, Vice Premier Liu He, who has been leading the talks with Washington, said on Monday.
“The U.S.-China trade war has intensified, and aside from the direct impact of tariffs, the uncertainty generated by the conflict is proving to be toxic for business confidence and investment decisions,” Westpac IQ said in a note.
Death of a thousand trade cuts. Nobody will be investing in China amid this. On the contrary, they’ll be pulling out. To the charts:
Spot down. Paper down more overnight. Rebar futures rolled forward and crashed. Coking coal is joining in. Port stocks of iron ore rose another 1.5mt last week. There is clearly plenty of ore and another 30mt is in the offing.
As China slows, steel falls, ore returns, and seasonal weakness arrives, there’s still only one way to go.
It is not up.