Seriously - the contrasting views on china is just ridiculous....

Seriously - the contrasting views on china is just ridiculous. Just late last week we had the long side of the story from Matthew Hope, Vice President commodity research @ credit Suisse. He states that when all inventory held at mills and ports are included days coverage are normal @ 25 days. Data that he's backed up with via my steel inventory surveys.

This week we have the short story. Now I'm open to all information I can get to make my own opinion and if we have another down week this week like last week in iron ore prices I think ill be running for the hills, but this article (if thats what it is) really does have a Stench about it:

"Earlier this week we discussed the reason for the recent drop in iron ore prices"

Who is having this discussion? Is it Mary and Marthur over a cup of tea?

The Reuters Article re mills not cutting capacity - yes I have to accept this as fact and attribute this fact partially to the drop in prices over the last f/n. Is it reasonable to expect this to be rectified? Cant see why not.

"Ok, so China lied again; that in itself is hardly newsworthy. After all China lies about everything, "

This can hardly been seen as an unbiased view

"China's activity means that instead of reducing production to reach a demand equilibrium, it had merely been stockpiling iron ore inventory at various ports around the country, while giving the world the false impression that output, and thus the market, was tighter than it was in reality, sending iron ore prices nearly doubling over the past year - one of the primary culprits for the global reflation wave that has been misconstrued as a global economic recovery - even though in recent weeks iron ore prices have stumbled as China's ruse has finally been exposed."

At best this can be seen as an unsubstantiated assumption. At worst a blatant lie - not unless the factual data from mysteel provided last week showing 25 days inventory cover,pmi figures, housing inflation etc is a lie.

"That chart above, however does not do justice to China's inventory glut, so here is another attempt at putting it in context from Reuters, which writes that with enough iron ore to construct Paris's Eiffel Tower nearly 13,000 times over"

Sounds like a lot - but then again when you consider the needs of a nation of 1.4b people, is it really?

"China's ports are bursting with stockpiles of the raw material and some of them are demolishing old buildings to create more storage space, trading sources said."

Where is the economic sense in demolition of buildings to store dirt that is going to halve in value, that nobody is going to want because there is 13000 Eiffel towers of the stuff floating around? Doesn't make sense to me.

"Needless to say, local merchants and producers are already starting to panic at visions of iron ore prices in freefall. Including another 40 million tonnes of iron ore at China's steel mills "that's too much of stock," said Li Xinchuang, vice chairman at China Iron and Steel Association. "It will be very dangerous for the price. That's what's very worrying about it," Li told Reuters at an industry conference on Thursday. Worse, Li said most of the stocks in ports were high quality iron ore despite perceptions in the market that the bulk of it was low-grade eliminating the ability to deny low quality ore."

Direct contrast to the mysteel data.

Paradoxically, even as China's iron ore glut hits extreme proportions, China continues to import the commodity with Australian miner Fortescue Metals Group, the world's No. 4 iron ore supplier which ships lower grade material mainly to China, saying its deliveries to the country are "continuing as normal."

With things so dire why is this the case? Maybe Nev's lying?