Commodities Bubble: Why to Avoid Iron at Current Levels

Base Metals Investing

Seeking Alpha contributor Muditha Weeratunga wrote about demand and supply side dynamics for iron ore and highlighted certain risks inherent in the commodity market. The editorial states that: If there is a scenario of oversupply of iron ore in the global markets and if prices come down drastically, the developing world countries will be willing to sell their iron ore at even lower prices to support their local economy. This will support a prolonged period of […]

Seeking Alpha contributor Muditha Weeratunga wrote about demand and supply side dynamics for iron ore and highlighted certain risks inherent in the commodity market.

The editorial states that:

If there is a scenario of oversupply of iron ore in the global markets and if prices come down drastically, the developing world countries will be willing to sell their iron ore at even lower prices to support their local economy. This will support a prolonged period of lower iron ore prices in the market with mining companies trying to cover their marginal cost.

To read the full editorial, click here.

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