Iron ore

Certainly fair to say I did not expect iron ore prices to be so strong. Commodities have a macroeconomic common variable (fiscal, monetary, COVID-supply impacts, reopening demand) which elevates prices, but look at steel production…


…iron ore imports…


at inventories….


…and still the macroeconomic impact dominates.

Fair to say we see the set up for oil, LNG, alumina, and ammonia as more constructive.

Pointing to rate cuts in China seems to point more to the reason for rate cuts. A poor macro backdrop against imported US monetary tightening, as opposed to a reason to get long iron ore.

Also, the size of the stimulatory efforts appears quite modest, which is commensurate with the desire to reign in property and infrastructure related excesses in the first place.

Still, as I write it, it does sound a bit like grumbling about the small portion sizes in the hall of terrible food.

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