On the back of our earlier note, on the China monthly data set, note that inventories at port continue to climb.
Although the visual pattern isn’t crystal clear, the econometric software we use detects the negative correlation between the rates of change in the two time series, which matches our economic intuitions (inventory build above some threshold, described as involuntary inventory accumulation, resolves itself through a) lower demand and b) lower prices).
That build continues to suggest an overhang to iron ore pricing.
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