Daily iron ore price update (PMI sag)

Tuesday, 1 June 2021

The ferrous complex is getting more and more volatile. I take this as a sign that we’re topping out given it appears to be a struggle between bulls and bears versus the former bulls only. Spot jumped. Paper went further overnight. Steel is lagging:

Yesterday’s steel PMI was soft with output booming but new orders falling 39. This index is very volatile so I don’t usually take fright until new orders are in the low 30s:

More importantly for now, the softening steel conditions are setting up mills for losses as iron ore price upside outpaces the end product:

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About the author

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.