Hot on the heels of tariffs imposed by The Obama administration on a desperately glutted and invested steel industry, the entire panic-buying “well the market is always right”, “China is recovering” narrative based rally in Chinese commodities has crashed back down to earth with an incredible thud. As one veteran trader in the China commodity markets put it “everything is plunging… except cotton,” with Iron Ore, and RUBBER down 7% today…
At least one industry executive “got it” – Baosteel’s Zhang: “The price rebound is not beneficial to the overcapacity situation…. It will delay the shutdown of (inefficient) capacity.”
How right he was…
Dalian Iron Ore has collapsed 30% in a month, down 7% today…
Steel Rebar has crashed 32% in a month, down 5% today… (it seems the brief BTFD support has completely collapsed)…
Hot Rolled Coil -28% in a month, down 6% today…
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