From Barron's Stocks to Watch:
Axiom Capital’s Gordon Johnson, a noted bear on iron ore and steel–and the stocks of companies like U.S. Steel (X) and Cliffs Natural Resources (CLF) that produce them–sees a crash in iron-ore prices coming as soon as the next four to eight weeks. He explains why:
With: (a) more iron ore supply coming in 2H16 and 2017, (b) speculation in China’s iron ore futures trading market (via the Dalian stock exchange) at a record high (and likely to end soon), (c) what appears to be a peak in China’s port stocks (which has been a crucial harbinger of price pressure over the past several years), and (d) demand for iron ore on the decline (measured by China crude steel output), we see the next crash in iron ore prices as 4-to-8 weeks out....MORE
