paraphrasing Andrew Dice Clay, “I got yer commodity super-cycle right heah!”
A big drop in iron ore consumption and price goes hand-in-hand with a drop in met coal usage and the collapse in the BDI (Baltic Dry Index).
Even the Chinese, who fouled up Dr. Copper’s record by stockpiling above their industrial needs, using it as a substitute for T-Bonds as a store of value, aren’t going to stockpile iron as a store of value. If steel consumption is forecast to be down, iron usage and price drop.
Not a good indication.
I’d love to see the price of steel drop. Concrete slabs too (a component of which is steel).
I’ve got a couple of metal buildings I need to put up. :-)
“...the buzz these days is about iron ore, a key ingredient in steel.”
Um, earth to Joe: Iron is THE key ingredient in steel.
You can have steel without carbon, moly, chrome, nickel, vanadium, etc - all those other alloying elements, but no iron means no steel, period, end of discussion.
Does this mean China has enough ghost cities now?
the time scales go not back far enough
the chart could be showing a “defestating drop” or it could be showing a pull back form a bubble; with a five-year-back or more chart, that might be clearer
infrastructure building is not a steady state in any economy, which is one reason steel companies have always had difficulties; periods of large infrastructure development slow down, scale back, and come back again, and slow down again, ad infinitum
Might be an opinion reaction to the following. After having read a few of his opinions while following economic news, I suspect that Mr. Weisenthal hopes for conditions that would keep the debt pile high for government incomes, real estate or something else related.
Iron Ore Price to Rebound as China Seeks Cheaper Imports
http://www.bloomberg.com/news/2012-08-21/iron-ore-to-rebound-as-china-seeks-cheaper-imports-commodities.html
[Bloomberg title and link only. No commentary from Bloomberg allowed to be posted at FR.]