"Everything Is Plunging" - China Commodity Carnage Continues

Tyler Durden's picture

Hot on the heels of Trumpian-size tariffs imposed by The Obama administration on a desperately glutted and mal-invested steel industry, the entire panic-buying "well the market is always right", "China is recovering" narrative based rally in Chinese commodities has crashed back down to earth with an incredible thud. As one veteran trader in the China commodity markets put it "everything is plunging... except cotton," with Iron Ore, and Rebar down 7% today...

At least one industry executive "got it" - Baosteel's Zhang: "The price rebound is not beneficial to the overcapacity situation.... It will delay the shutdown of (inefficient) capacity."

How right he was...

Dalian Iron Ore has collapsed 30% in a month, down 7% today...

 

Steel Rebar has crashed 32% in a month, down 5% today... (it seems the brief BTFD support has completely collapsed)...

 

Hot Rolled Coil -28% in a month, down 6% today...

 

 

Makes one wonder what the world's only marginal-buyer-of-crude could do 'retaliate' to a nation imposing tariffs like that which is also dependent on a bounce in oil prices to supports its 'wealth-creating' stock market?

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DownWithYogaPants's picture

I am Rebar from Beopna 7.  Take me to your leader!

38BWD22's picture

 

 

Cheaper rebar (from China) is CHEAPER!

But use it in YOUR building...

tarabel's picture

 

 

From a structural standpoint, think of it as rebranch.

StackShinyStuff's picture

Stuff hasn't been this cheap since all the WTC scrap came onto the market.

philipat's picture

So when will China retaliate with tariffs on GM and Boeing?

And BTW, it must have been Chinese Rebar used in the WTC because they are the only 3 large buildings anywhere in the world to have "collapsed" due to fire?

StackShinyStuff's picture

My point was that all the scrap was shipped to China, but can't disagree with your observation on those peculiar collapses

Arnold's picture

The Mohawks would want a quiet word with you.

Theosebes Goodfellow's picture

Since no one has said it, here goes:

"China rebar FUBAR!"

Hey, someone had to...

RaceToTheBottom's picture

The comparisons of comodity levels don't go back far enough to have it stop now.  They have to go lower than they were in 2008/2009.

Fall, Fall, FreeFall.

indygo55's picture

Anyone that remembers the Chinese drywall from 2005-2007 issue would do well to steer clear of Chinese rebar. Its not refined enough and leaches carbon way more then it should and is filled with porosity. Total junk. 

 

strangewalk's picture

We used to work with Chinese tool steel in molds and dies--yes much of it too was substandard

Veruca Salt's picture

Rebar crashed because people found out what the hell it was they were panic buying...

dr.charlemagne's picture

wasnt there a Huge Tariff hike anounced over the weekend?

flaminratzazz's picture

Long Chinese mystery meat to Africa.

Theosebes Goodfellow's picture

Hmmm. You're right, this Peking Duck is a little chewy out of the can.

laomei's picture

chinese steel industry collapsing as if... it were made of chinese steel.

Ace006's picture

What's sauce for the chicken . . . .

Ajax_USB_Port_Repair_Service_'s picture

I'd like my hot rolled coil with cheese and a dill pickle please.

Shed Boy's picture

"As one veteran trader in the China commodity markets..." You mean the guy that made his first trade 2 years ago? Theres no such thing as a "veteran trader" in China. Who writes this stuff? Think much?

RealistDuJour's picture

I'll take this softball toss..

Simonting is Wong!

Monetas's picture
Monetas (not verified) May 23, 2016 1:00 AM

Socialist allocation model .... China has cheap rebar .... Venezuela has cheap gas ?

TheRideNeverEnds's picture

Bullish.

What is limit up on the S&P right now? 100 points?

KuriousKat's picture

reallocating the excess rusty iron rebars to be ground with lemonade will make anemia in china virtually non existent an save billions in health care costs Furthermore..an added benefit is turning them into refrigerator magnets thereby cornering the entire world market, and putting the rest out business, Flashback Shale...where are they now? Nailguns and suicides..supply and demand..staggering...buy!

Until someone else comes up with a different use for refrigerators, ..The Recoil of this is will be  enormous. Do not under estimate these folx, and for the conservative investor.. buy as many magnets as you can now...keep stackin!

ft65's picture

Surely there's an enterprising oligarch out there with law makers and financiers in his pocket who can do a deal on all that cheap steel... Oh wait!

ft65's picture

Surely when Trump starts rebuilding America's crumbling infrastructure, all that cheap rebar and cement will save a fortune, especially if they can outsource the designs to China / India. Like the original railways, they could import labour from China to get the work done.

Savings could be put into the EBT, QE and tax return programs. What am I missing here?

NoPension's picture

Mexican labor, Chinese rebar and cement, Indian engineering, Japanese and Korean heavy equipment, Venezuelan oil.

Rebuilding American infrastructure will be a boon for the economy and jobs....of everybody but Americans.

Winning....

unklemunky's picture

It is pretty damned funny if you ask me. The so called smartest guys in the room are the dumbest fuckers around. I work for a fortune 50 company and it is ran by a bunch of idiots with MBA's........who are hired by older idiots with MBA's. They think since they got them an MBA.....from professors who have never tried to earn a real living in their entire lives, that they know all there is to know. These same wonderlings have infested our governments and our financial systems. A bunch of whiney babies who have been pampered their entire lives. We need to get back to the basics where people make things again. Things that actually provide value. Not crap puched out of a 10,000 unit per day assembly line. Anythng past a basic college degree is a waste of money and time.

strangewalk's picture

Today a basic college degree is a waste of money and time

Last of the Middle Class's picture

MBA:May Break Anything.

RaceToTheBottom's picture

I guess we got to build weapons from plowshares.....

hedgiex's picture

Deformed markets exacerbated by rigs will not clear the commodities. It is now how desperate you want for your lemonade in exchange for steel bars where the nearest potential buyer is Joe down the road. Crony Capitalists are extracting their rents with tariffs, quotas, etc in not allowing the malinvested deflationary gifts to be trickled down to the consumers