Geopolitics of iron ore

Posted: December 22, 2016 in Uncategorized

Iron ore surged in 2016.

Iron Ore depends on China – so that is where the attention should concentrate.

In China a series of policy mistakes (the 276 days rule, an abacus miscalculation and environmental issues) provoked a shortage of coking coal and thermal coal).

Also some speculation that was in the stock market now shifted to commodities futures.

So, similar to oil, this imbalances will be addressed in a matter of months and Iron Ore prices will reduce in time.

Also the potential of the US Trump infrastructure projects will not be enough to offset all of China demand.

So, not a collapse, but probably a return to Iron Ore USD55.

That the even the Australian Government Budget did not want to take into account of the spike in iron ore – it should give you an hint.


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