The ferrous complex remained bonkers on November 24, 2021 as spot popped the ton, paper calmed overnight and steel took off:
Some of this is obviously the massively overblown hype around Chinese stimulus. But, equally important is probably the return of the energy crisis.
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Coking coal futures are continuing to fall:
But, thermal coal has launched again:
This has nothing whatsoever to do with fundamentals. China now has oodles of coal. It will face a glut in a matter of months. Expect the NDRC to act on this shortly.
What is driving it is this:
Stemming from the ongoing European gas crisis:
In the last few days, we’ve seen a confirmed La Nina weather pattern and new US sanctions on Nord Stream 2. That has been enough to send speculators wild in gas futures.
As we know, rising energy prices may delay the resumption of Chinese metals processing so that long trade has taken off again as well.
It’s all political, incredibly short-term, wildly speculative and will bust in due course.
But that’s post-COVID markets for you, price discovery and social utility lost to easy money and greed.