Daily iron ore price update (Houston, we have a problem)

Monday, 26 July 2021

The ferrous complex stabilised on July 24, 2021 with spot up slightly and paper too. Steel has not updated:

Since January, I have held a “sell the rallies” position for iron ore. I am now moving to an outright “sell” position. There are five reasons.

First, there is early evidence that this time it is different in Chinese attempts to curb steel production and drop commodity prices. In the past, this strategy has always failed because a fragmented steel mill sector boosted output into improving margins as steel prices rose. This drew in more iron ore, passing price rises to upstream sectors.

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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.