Macro: Is it time to buy iron ore?

Key Points The iron ore shakeout has only just begun There will be a time to buy but only when the blood is in the streets Focus on major, low-cost producers  As the primary driver of a 150-year boom in its terms of trade, iron ore has been good to Australia, the central pillar of our contemporary prosperity in fact. Once again, we got lucky, this time with unique convergence of three cycles: Chinese catch-up growth and urbanisation; an unprecedented steel boom; and a massive supply expansion. Trouble is, all three cycles are in the process of either reversing...

As the primary driver of a 150-year boom in its terms of trade, iron ore has been good to Australia, the central pillar of our contemporary prosperity in fact. Once again, we got lucky, this time with unique convergence of three cycles: Chinese catch-up growth and urbanisation; an unprecedented steel boom; and a massive supply expansion.

Trouble is, all three cycles are in the process of either reversing or ending altogether, making the future of iron ore the bleakest of any global commodity.

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