Daily iron ore price update (do not adjust your TV)

Iron ore prices for August 18, 2020:

Do not adjust your TV. Spot is approaching my $130 target and I may have been too bearish. Paper to the moon. Rebar too. I suspect coking coal is being destocked in a desperate bid to sustain steel mill profitability.

This still has a month or so to run before seasonality weighs. The key is low inventories in China which are restocking:

But probably have another 30-40mt to go before any peak. That will take another six months.

How high could prices go over that period? $150 is now possible. When iron ore runs it runs hard.

Empty apartments are still booming:

And Brazil is still struggling:

I will go so far as to say that if Vale does not return volumes soon then $150 is the base case before the crash.

David Llewellyn-Smith
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