The crucial thermal coal price which has supported both coking coal and iron ore demand by removing 120mt of EAF steel output is still falling in China but lifted a little in Newcastle:

The price should keep falling and Chinese electricity output and metals processing resume over the next few months. As EAF returns, iron ore and coking coal demand will crash.

Scrap prices are also falling now:

One can’t be certain of the timing but the handoff to EAF should happen given environmental imperatives.

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Houses and Holes

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.

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