Iron ore prices for December 17, 2020:
Spot is going to new highs today after paper blasted off last night. Steel is still rising so some inflation is being passed on.
There is no near term end to this:
- Chinese demand is excellent;
- Chinese inventories are short;
- ex-China demand is recovering;
- DXY is getting hammered;
- La Nina is here to deliver supply shocks, and
- Vale keeps missing targets.
$200 is ahead in Q1. But be warned, by Q2 some of these tailwinds will be comging off. By mid-2021, even more so.
It looks like boom and bust to me.
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