While the world is still transfixed by Ukraine developments, China has reported a significant resurgence in COVID cases. Case loads are still relatively small compared to some other countries. However, the economic effects of anti-COVID measures in China are amplified because of their zero-COVID policy.
Shenzen is already under lockdown. If it spreads, there will certainly be deleterious effects on the Chinese economy and even the global economy. There is no need for major alarm now, but traders need to monitor this closely.
Iron ore price has breached 167, almost doubling from Nov 2021 lows in just 4 months. What a ride it has been. The drivers for the outperformance remain the same – supply disruption, expectations of increased demand and uplift from general euphoric commodity sentiment.
At these prices, it is potentially entering bubble territory. It is probably still too early to short it, as the situation is still very fluid. Thus I am just continuing to monitor closely.
Iron ore prices are rising rapidly, increasing from about 125 (2 weeks ago) to about 158 today. This is fueled by disruption of supply from Ukraine, and perhaps also by general commodity sentiment. Until the disruption is resolved, it would be advisable not to short iron ore stocks. I also would not go long, as prices have already risen significantly. The best course of action is to just continue monitoring news flow and price action.