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I haven’t seen a good old-fashioned Big Iron rout in a while. FMG is leading, down 8-9%, and forming a bearish descending triangle chart while it is at it. If it breaks, then look out below:
It’s not much better for RIO. Why BHP is holding up better is not obvious given it is now an iron ore stock post-oil division:
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Dalian is down but not falling out of bed:
Shanghai rebar is also taking a dump:
This could run for a few weeks yet. Chinese steel mills are not going to stop destocking until they have restored profitability:
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Beyond that, there are seasonal tailwinds but also the ongoing Chinese property rout to contend with.
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.
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