The ferrous complex was catastrophic on October 12, 2021 as spot was smashed, paper eased and steel was thumped:
Oddly, spot traded off crashing Singapore futures rather than a calmer Dalian. Anything seems possible these days.
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The underlying conditions are extraordinary. CISA’s late September output cratered 11% to lower output than 2013:
Some (a lot) of this must be shuttering EAF mills. CISA steel inventories fell almost as far, so this looks like power rationing. It is the equivalent in annualised volumes of China’s entire EAF fleet.
This is unprecedented stuff. As I noted yesterday, some short-term bulls are arguing it is an iron ore positive but I’d say discretion is the greater part valour.
With Chinese property development in meltdown, a massive energy shock underway, and China in or entering a recession, balancing the outcome of such unique forces is impossible.
Look through it to what is coming. Less steel, less iron ore, lower prices.