And noted as well that housing starts are down 40% (and more) which once fully absorbed into steel output is 160mt less steel than last year, an enormous drop.
Some explanation for the disparity arrived with yesterday’s China trade data as steel exports surged, presumably as Russian and Ukrainian steel dropped:
If sustained, this could account for 40-50mt of the missing steel demand.
We could further surmise that the full impact of crashing housing starts has not yet hit the steel market while some of the infrastructure stimulus has.
That could make up some more of the deficit.
Still, there is no getting away from the fact that iron ore imports are quite uninspiring as they run at 2016 levels:
I still can’t find any rational path to a price of $143 for iron ore so, as the global recession takes its course over H2, 2022, I expect the price will crash.
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.
