China isn't that silly to stop iron ore imports from Australia. There isn't replacement for Australian iron ore, it would mean shutting down steel production and shortly after infrastructure spending.
Australia exports 53% of the worlds iron ore trade, but China buys 60% of the world trade. Even if china could buy all other iron ore it would leave a deficit of 230 million tons per year / more iron ore production than FMG produces. Although with Vale having problems in Brazil it's actually a larger impact at the moment.
For China it would mean shutting down steel mills and importing steel, globally it would mean a booming steel price and a scramble to open new steel production. If you include scrap, effectively removing 10% of steel production globally for political reasons would start a global spate of protectionism of steel production to safeguard construction and military uses of steel, it would be an own goal of epic proportions. All this as we are about to see infrastructure spending go through the roof for stimulating the global economy...
China has been very careful to pick industries for which replacement product can be found within reasonable timeframes and which doesn't have global flow-on effects. I'd predict they won't pick LNG either because they'd their geopolitical rivals in the region are the biggest importers and could flex their mussels by outbidding on spot cargos / up-taking flexibility in their contracts globally which would leave China short of gas.
Iron ore like LNG and oil are cyclical industries, there's an infrastructure boom coming, which will drive steel demand, then following that there will be and LNG and Oil growth as energy consumption booms and lack of investment from the downturn bite (IMO). I wouldn't dismiss either commodity this early.
The same investment boom that will drive infrastructure growth and iron or demand will drive demand for LNG demand following. I wouldn't be too quick to dismiss iron ore as LNG demand is somewhat linked.. if lagging... one investment hypothesis almost carries the other.
China isn't that silly to stop iron ore imports from Australia....
Add WDS (ASX) to my watchlist
 (20min delay)
|
|||||
|
Last
$27.28 |
Change
0.110(0.40%) |
Mkt cap ! $51.79B | |||
| Open | High | Low | Value | Volume |
| $27.16 | $27.43 | $27.08 | $103.0M | 3.752M |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 1 | 200 | $27.27 |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| $27.29 | 183 | 1 |
View Market Depth
| Last trade - 16.10pm 03/05/2024 (20 minute delay) ? |
|
|||||
|
Last
$27.26 |
Change
0.110 ( 0.41 %) |
||||
| Open | High | Low | Volume | ||
| $27.15 | $27.43 | $27.09 | 959566 | ||
| Last updated 15.59pm 03/05/2024 ? | |||||
| WDS (ASX) Chart |