Which has led to big price falls in exporters with lower grades on offer. In India, which became the swing producer over the past year with a huge jump in export volumes to China, prices crashed in the last auction:
In part, this is weak domestic demand owing to COVID but the Chinese no longer want the ore, either. In fact, demand is so bad that auctions have been postponed.
The price correction has begun at the margins. It will steadily make its way to the centre.
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.
