- Waning demand and record inventories will paint a nightmarish picture for iron ore prices over the coming months, says Axiom Capital's Gordon Johnson, who suggests adding to short positions in U.S. Steel (X), Rio Tinto (LON:RIO) (RIO -0.6%), Cliffs Natural Resources (CLF -0.2%) and Fortescue Metals (OTCQX:FSUMF).
- Iron ore prices are on the precipice of a “spectacular decline,” Johnson writes, as iron ore imports into China were up 11.4% Y/Y in March and up 12.2% YTD; due to an anticipated 1%-2%% drop in Y/Y crude steel production in China in 2017, Johnson believes elevated imports through March point to continued inventory build, as well as a lack of seaborne supply discipline to falling iron ore prices.
- Chinese iron ore futures plunged 8% today amid fears that expected demand for infrastructure and construction projects in China may not materialize as expected.
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