Texture from Reuters:
“Overall production curbs in Tangshan in September are on par with August, which are loose,” Huatai Futures said in a note, adding that output restrictions in Wuan, county-level city of the second-biggest steelmaking city of Handan, tightened slightly this month compared with August.
“We believe that Chinese demand has further room to grow and outpace production in Q419 and 2020 as the government is now more likely to step up targeted stimulus for the infrastructure sector on the back of a more protracted trade dispute with the U.S.,” according to Fitch Solutions Macro Research.
In a word, bollocks. Property is slowing and industry is shrinking. Demand is toast.
As for weak output caps, that just means an even larger steel glut and falling prices:
There is no escape as steel prices fall so will iron ore. To the charts:
Spot up. Paper up more. Steel less so.
The only thing that concerns me about the period ahead is when Chinese steel mills restock bulks going into new year. The year has been quite disrupted so its quite uncertain.
Beyond that, iron ore going down, down.