solving the great iron ore mystery, writes Chanticleer

His answer was deceptively simple: iron ore prices are high because Chinese steel mills have been producing at a record annualised rate of about 1.08 billion tonnes, despite the weakness in the residential property sector and despite the fact that steel mills are running at losses. Partly this high production rate (blast furnaces, which use more iron ore, have been running at a utilisation rate of about 90 per cent) reflects a doubling of steel exports out of China. But McKay says that for all the concern about the property sector, the industries that consume the other 65 per cent…