Texture from Reuters:
There is still “a degree of scepticism regarding the likelihood of any concrete near-term progress” in the U.S.-China trade talks, ANZ Research said.
The downbeat outlook for steel demand, along with anti-pollution production curbs in China, dragged prices of steelmaking raw materials lower, including iron ore.
“Coupled with the slowing steel market, an unexpected surge in (China’s) iron ore imports in July and increase in port inventory crushed iron ore prices,” said Helen Lau, analyst at Argonaut Securities in Hong Kong.
Yep. And there’s more to come. $60 this year. To the charts:
The key is now steel prices. They look to me to be about to crash back to the 2016 ranges. There’s just piles of it everywhere for rebar and HRC:
World Steel was out with its July update too:
World crude steel production for the 64 countries reporting to the World Steel Association (worldsteel) was 156.7 million tonnes (Mt) in July 2019, a 1.7% increase compared to July 2018.
China’s crude steel production for July 2019 was 85.2 Mt, an increase of 5.0% compared to July 2018. India produced 9.2 Mt of crude steel in July 2019, an increase of 1.7% compared to July 2018. Japan produced 8.4 Mt of crude steel in July 2019, down 0.4% on July 2018. South Korea’s crude steel production was 6.0 Mt in July 2019, a decrease of 2.1% on July 2018.
The US produced 7.5 Mt of crude steel in July 2019, an increase of 1.8% compared to July 2018.
Brazil’s crude steel production for July 2019 was 2.4 Mt, down by 20.7% on July 2018.
Turkey’s crude steel production for July 2019 was 2.9 Mt, down by 10.6% on July 2018.
Crude steel production in Ukraine was 1.8 Mt this month, down 1.7% on July 2018.
The ex-China world is already contracting. China will follow. The entire global ferrous complex is only halfway through an epic crash.