While iron ore prices might be on a short-term tear, global steel production is not.
Data released by the World Steel Association overnight revealed that global steel production slipped to 135 million tonnes in April, a decrease of 1.7% on a year earlier.
In the chart, global figures are reflected in blue, those from China in purple and global ex-China in yellow.
China, the world’s largest steel producer, saw production fall to 68.9 million tonnes, 0.7% lower than April 2014, while Japan, the second largest producer globally, saw production collapse by 6.1% to 8.4 million tonnes.
While the spot iron ore prices fell by a significantly larger amount over the same time period – some 46.7% – with steel production weakening and global seaborne supply continuing to grow, it will be interesting to see how long the iron ore rally can last in light of deteriorating fundamentals.
Business Insider Emails & Alerts
Site highlights each day to your inbox.