Daily iron ore price update (lunatics chasing pennies)

Monday, 11 October 2021

The ferrous complex returned from holiday with a bang on Friday October 8, 2021 as spot rallied, paper jumped and steel climbed:

Do not be fooled. This is a measure only of how crazy markets are right now. Some folks are arguing that the rally is justified by the notion that Chinese power outages will force the closure of more EAF production, supporting BOF and iron ore. There is some evidence for this. Scrap output had already plunged in August:

However, there are two points to make in response.

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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.