Friday, May 12, 2017
Poor fundamentals undermine the iron ore market rally.
Iron ore confounded its sceptics in 2016, gaining more than 50% after three straight years of decline. Sentiment towards the steel-making ingredient was bolstered by renewed fiscal stimulus in China and then by the promise of a physical infrastructure renaissance in the United States after the election of Donald Trump as president. Fundamentals have now begun to reassert themselves though amid growing Chinese inventories. Indeed, the commodity has lost nearly 40% of its value since peaking at more than 90 dollars per tonne in late February.