The great ferrous crash continued May 26, 2020 as Beijing maintained the rage against speculators in steel and iron ore alike. Spot iron ore is unchanged which, I suspect, is an administrative error. Paper was slaughtered again yesterday and steel is printing an epic crash:
Here’s the chart:
There are 959 words left in this subscriber-only article.
Start your free 14-day trial today!
As steel mill profits are eviscerated, expect them to destock iron ore into the end of the financial year. Thus this rout may still have further to run before we see a new bid in July/Aug.
The CCP jackboot is stomping on anything remotely bullish:
China’s banking regulator has asked lenders to stop selling investment products linked to commodities futures to mom-and-pop buyers, three people with knowledge of the matter told Reuters, to curb investment losses amid volatile commodity prices.
It has also asked lenders to completely unwind their existing books for these products, which they manufacture and sell to individual investors, said the sources, who are involved in and have been briefed on the decision.
The China Banking and Insurance Regulatory Commission’s (CBIRC’s) order to exit these products has not been reported before. It issued the order this year, two of the sources said.
“The risk contained in banks’ commodity-linked investments cannot be easily spotted by ordinary investors, neither can they bear it,” one of the sources said. “Banks also don’t have enough expertise to run such products properly.”
There’s possible liquidation risk in that. Sell all rallies.