Have I made my sell the rallies call too early? Reuters reports that ex-China demand is rebounding:

But, as Chinese credit shows today, the slowdown in China is being baked in now. It won’t arrive until H2 but it’s coming:

As well, Chinese steel mills are still losing money at these prices. That means they will have to keep raw material prices under pressure wherever they can. That means volatility.

I expect firm pricing through March and April and then a big drop in May. Followed by rallies but steps lower in price ranges after that.

So, I’m still happy with the sell the rallies call.

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David Llewellyn-Smith

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

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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