Daily iron ore price update (a lot of steel)

Iron ore prices for September 23, 2020:

Spot down again with more to go. Paper too. Steel has not updated. Steel output remains crazy into mid-September, via CISA:

Indeed, steel inventories are huge for this time of year:

I remain relatively comfortable with this given steel mills are policy operations at this point. That said, these inventories are an opportunity for mills to destock iron ore seasonally so I expect more downside price action ahead, exacerbated by broader market selling and a rising DXY.

But I still see this as a BTFD scenario.  Chinese governments are flushed with dough for a new round of bridges to nowhere:

It’s too early to call any end to the empty apartments pump as well:

Vale will slowly return the volumes but is still fighting a tide of bad press and virus.

My outlook is unchanged. Down into October. Then up bigly into new year as Chinese restocking continues. Topping out mid-next year for another secular decline.

David Llewellyn-Smith

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