Iron ore prices for June 1, 2020:
Spot somehow fell despite runaway futures which then reversed overnight.
The surge is driven by a combination of recovering Chinese demand as empty apartments blossom with infrastructure:
The steel PMI launched back into the positive at 50.9 with new orders surging to 52.6:
Leaving China short of the magic dirt:
Even as Brazil sinks into the virus mire:
Don’t be fooled by weekend testing. This is going parabolic still.
It seems likely to me that iron ore is headed higher still. Last year’s $130 is a good target while Brazil is so troubled. It has mismanaged the virus Trump-style with haphazard lockdowns so it could take all year to clear it up. Or longer. This should mitigate seasonal softness too.
If Brazilian mines are forced to close then the sky is the limit.
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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