Chinese steel pours into the void

The signals for Chinese steel output are poor across the board. Another arrives today:

Yet, CISA steel output numbers have rebounded again:

In contrast with MySteel numbers which are pancaked:

The CISA numbers are the better data set. NBS figures follow them closely. Steel inventory numbers are rising, so that probably explains the output strength.

The question is, when will underlying demand overtake apparent demand to deflate the market further? Steel prices need to fall further, which will drag down iron ore. Increased output will do it.

This is rebar futures versus TSI for September:

If we can hang on that long, the Sep/Oct seasonal sell-off looms as tricky for iron ore.

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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.