Hi Kacy, thanks for the link its certainly an eye-opening and...

Hi Kacy, thanks for the link its certainly an eye-opening and worrying post. I am being careful in how I interpret what was said, especially in relation to the 12 months stockpile.

Specifically, it was said that one particular port has 12 months stockpile, not the whole of China. I've read previous and recent articles which put the stockpiles at around 70Mt, compared to the annual chinese consumption of around 700Mt.

If we take the current forecasts to be correct, IO consumption will decrease by 20-30%. Let's say its 30%. That means next year consumption in China will be 700 - (0.3 x 700) = 490Mt. The stockpile is 70Mt, which represents about 14% of next year's consumption, still only about 6 weeks' consumption.

To me, something doesn't add up. On the one hand we hear there are no ships picking up IO because of huge stockpiles, on the other we hear that the stockpiles are being built up in order to prepare for the annual benchmark contract negotiations. I'm sure there is a lot of misinformation out there, and while physical observations are certainly important it has to correlate to what is happening overseas.