The ferrous complex stemmed the bleeding on June 21, 2022:
I maintain that we have a lot of downside ahead as the global economy stalls into recession but we should note that there is a strong element of seasonality in recent moves as well.
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June is the peak hot and wet season in southern China and it usually inhibits building:
Especially this year, via John Kemp:
In some parts of southern China, rainfall has been the heaviest for 60 years (“Southern China hit by severe rains, floods as ‘dragon boat water’ peaks”, Reuters, June 21).
The Ministry of Water Resources has issued flood alerts across most southern provinces since the start of June (“China launches level-IV emergency response for rain in southern areas”, MWR, June 13).
In response, top officials from the central government have been supervising massive releases from the upstream dams to manage flood risk in the region’s major river systems.
For example, total precipitation at Xiangjiaba on Jinsha River, at the border of Yunnan and Sichuan provinces, and the site of one of the country’s mega-dams, has been more than 50% higher than the average in 2014-2021.
Cumulative precipitation at Xiangjiaba so far this year has been 571 millimetres, up from 267 at the same point in 2021, and the highest since 2016.
Those looking to reload shorts into iron ore miners might want to take these trends into account.
A decent bear market rally into later July could be a better entry point.
Not advice, of course.