It will be interesting to see what happens to the IO price. There are a number of things playing out on the bull and bear case:
1) large infrastructure spending globally 2) housing market at least in Australia is going gang busters 3) Delta on the loose 4) Xi wanting to control IO, copper and nickel prices 5) a major developer in China going bust 6) third world countries outside of China industrializing.
I would say that this sharp fall is likely from a lack of short term buying on spot. However what will happen longer term. Will the demand pull of steel outweigh the short term policies of China?
This article in the SMH outlines that Xi doesn't want steel production to exceed last year, yet in the first half of 2021 it was 12% ahead. So will it pull back 12% in the second half, or is this a ploy to drive IO prices down, not unlike China's auctions recently auctioning other commodities?.
"With the authorities mandating that China’s total steel production shouldn’t exceed last year’s, that implies that the industry will need to offset the 12 per cent increase in the first half with a similar reduction in the second half, which helps explain why the iron ore price has been tumbling."
Either way we all know that GRR is going to come out with cracking numbers very shortly, has 500m cash in the tin, and has a premium green pellet that it as the top of the demand pile. GLTAH
GRR Price at posting:
62.5¢ Sentiment: Buy Disclosure: Held
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