SAN FRANCISCO (MarketWatch)—China and Australia, two economic powerhouses on opposite sides of the supply-demand equation, are critical to iron ore’s recovery—and by most accounts it may be a lost cause.
Iron-ore prices are in a free fall as slow demand in China for the mineral—and steel, which is often the end product—as well as a supply glut driven in part by rising production in Australia, continue to weigh on iron ore.
“The apparent loss of investment confidence in China’s broader industry is exaggerating the bearish impact of Australia’s ongoing supply growth,” economists at Morgan Stanley wrote in a recent report.
