Our view: Iron ore rallied to the highest level since early June, which appeared to be disconnected from fundamentals, and tied instead to future expectations for stimulus from China given a weaker macro backdrop reported on the week. Met coal also increased, albeit was mostly rangebound, supported by restocking from China and despite a continuation of the port strike in Vancouver (CRU). Underlying steel production remains strong with surveyed blast furnace utilization rates still elevated at 91% while steel mill profitability is just above breakeven levels (CRU).
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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.
