Daily iron ore price update (the failed bully)

Iron ore prices for December 14, 2020:

Spot flamed out. Paper too. Steel has not updated.

Yesterday’s outburst in Beijing about unfair trade practices managed a little correction. But, fear not, such tantrums are typical for this time in the cycle. Beijing and CISA have been spitting the dummy during price spikes like this for many years.

In fact, given how aggressive China has become, I would not be at all surprised to see arrests and hostage diplomacy before long, which will, of course, backfire in even higher prices.

Any iron ore miners reading this should take that as an official risk assessment and pull their people out of China.

The outlook remains bullish with the odds favouring higher prices yet:

  • geopolitical risk;
  • supply tightness (easing over time);
  • good demand;
  • inventory shortages and rebuilds;
  • La Nina supply disruptions.

Stay long for a shot at $200.

David Llewellyn-Smith
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