Daily iron ore price update (nothing good)

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.

David Llewellyn-Smith

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.

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