Daily iron ore price update (more downside to come)

Iron ore prices for October 26, 2020:

Spot down. Paper firmed overnight as broader markets tanked. Steel is softening.

Chinese port inventories jumped above 128mt last week:

This remains a bullish story given there is another 32mt to go. That said, the rate of climb is very sharp so mid-2021 will cover it off.

Empty apartment sales remain weak:

Steel mill profits are suffering:

Things are made worse by the the coking coal price which is rising domestically (though it has tanked to $105 seaborne) in the wake of Chinese blockades of Aussie coal. So I still see more downside ahead for iron ore before we enter the more bullish phase of restocking across new year.

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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.