Iron ore smashed

It had to come. The Chinese stimulus is a bust for commodities, most notably iron ore.

SHFE and SGX both slumped yesterday:

Mad Dalian too:

There are two arguments now in the short term.

For bulls, steel mill margins have improved so output might too. Also, we are approaching seasonal positives from November and especially December.

For bears, the shorts have been cleared and new loose hands hold the wrong assets. Everything is now overpriced relative to stimulus impacts. The Chinese FE supply chain is stuffed to the brim so seasonals don’t matter as much as usual.

I favour the bears.