The leverage bomb holding up iron ore

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The ferrous complex is falling apart; it just doesn’t know it yet. Steel prices are collapsing. The spread to iron ore is eviscerating mill profits as inventories pile up. This is both rebar and, more importantly, HRC.

It’s so bad that the need for a New Year steel restock is nearly gone.

Mills are going to have to cut production hard.

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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.