Iron Ore has bounced over 20% from its low last week however after collapsing almost 60% its only ripple in the pond. So far the major sector players have recovered in-line with the important commodity for Australian trade i.e. BHP Group (BHP) 9%, Fortescue (FMG) 30%, Mineral Resources (MIN) 24% and RIO Tinto (RIO) 11%. Not surprisingly the greater the leverage to the bulk metal the greater the bounce. As is common the stocks found their bottom a few weeks before iron ore and similarly we believe the likelihood is they will top out before the bounce runs out of steam.
- MM is looking for iron ore to bounce another 25% as China looks to relax its aggressive curbs but after the aggressive decline of the last 6-months I would expect it to be a volatile journey.
MM can see another 25% upside in iron ore
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