current spot price, page-15

Agree you can make charts say what you want. That article dates back a couple of weeks and you can see that iron ore has already followed the rebar price down. Rebar since bounced a little, but has given back those gains today.

I'm not concerned with the short term, but seems to me we have a situation of oversupply in the global steel market that stimulus won't resolve as it isn't caused by a temporary economic downturn. China has simply built too much capacity and now needs to support it to maintain employment.

The argument that high cost Chinese iron ore producers will be protected may be missing the point. Chinese aluminium smelters, steel makers etc may be protected as they seem to survive on very low, even negative margins. China can't support the price of the commodities but they can subsidize these operations somewhat, putting lower cost western producers out of business, before their own.

I doubt China would do that with iron ore as they are so far from lowest cost that they can never compete. Its also not an important industry to China in employment terms. From their almost desperate actions investing in new suppliers, its clear that they would rather have lower prices. The strategic value of having Chinese iron ore suppliers is about trying to put a ceiling on prices, rather than a floor. Much the same way as the pig iron operations cap the nickel price.