Hot on the heels of Trumpian-size tariffs imposed by The Obama administration on a desperately glutted and mal-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 Rebar 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…
One word to describe mainland commodities: TIMBERRR???
— Simon Ting (@simonting) May 23, 2016
Makes one wonder what the world's only marginal-buyer-of-crude could do 'retaliate' to a nation imposing tariffs like that which is also dependent on a bounce in oil prices to supports its 'wealth-creating' stock market?
The post “Everything Is Plunging” – China Commodity Carnage Continues appeared first on crude-oil.top.