Daily iron ore price update (Glasenberg’s doom)

The ferrous complex was weak again on August 17, 2021 as spot hit news lows, paper fell further overnight but steel bucked the trend:

There’s not much else to report which is the problem. No China stimulus means we are going lower.

In news of interest, there’s Ivan Glasenberg at the AFR:

There are going to be major changes. At the moment the commodity is reaping enormous economic benefits for Australia because there is no major competitor besides the Brazilians. China produces very little iron ore.

However, iron ore will start being produced by the Chinese in Guinea at the vast Simandou project. With the geopolitical debate that is going on between China and Australia, the Chinese may try to make that happen faster than previously anticipated. They are going to most likely achieve 200 to 250 million tonnes [a year] out of Guinea. When that happens, Australia is going to have to decide what to do: compete or cut back production to avoid oversupplying the market and depressing the price.

That’s the tip of the iceberg. Just wait for demand to start falling as China’s urbanisation impulse fades and scrap rises.

That is, collapsing volumes and prices.

Houses and Holes
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