These are only one-day results, so they shouldn’t be read into too much, but experts say it’s clear the demand for iron ore and steel is not going away.
“We estimate that Australia probably shipped about 72 million tonnes of iron ore in May, while Brazil exported about 26 million tonnes. This is consistent with prior months and suggests actual physical demand for the ferrous metal remains intact,” they said. As “unimaginable quantities of Aussie iron ore flood ex-China markets”, global iron ore prices will collapse, writes Llewellyn-Davis.
The bigger hit, however, will be to national income – Australia will reap at least $150 billion this year in export revenue from iron ore, “nearly all” of which will “be wiped out by the combination of volume and price pressure”.