Wednesday, May 23, 2012

Chinese slowdown hits iron ore prices

Getting accurate data regarding economic activity in the Middle Kingdom is always difficult. I've blogged about it before and have grown to look at circumstantial indicators for clues as to what's happening in there. Mr Chovanec and Soberlook are two blogs who've been writing about evidence of a slowdown for some time now.  

One of those indicators is sliding back down again and is close to the panic lows of last fall. Iron Ore prices did not bounce much from the October lows and are now inching downward again.

News of the Chinese refusing to purchase previously ordered cargoes of Iron Ore and Coal is additional data supporting the slowdown thesis.  A serious slowdown in China would not bode well for the world economy considering Europe's problems as well.  Keep an eye on Iron prices. If they fall through the October floor I'd be cautious.

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