CVRD

I pulled an interesting point from Citi's latest June 10th Iron Ore piece by Alan Heap regarding BHP, Rio Tinto, and CVRD. It is a warning signal for those who see a higher BDI and higher Chinese iron ore imports as a "green shoot".

At one point he explains in the piece, that while Chinese imports of iron ore have been up 25% YTD, Chinese steel production has only been up 3%. What makes up the difference? Falling domestic iron ore production plus some inventory build. Note I have provided links to online sources with similar numbers to what Citi has, just to give some verification beyond the report. 

My addition to the Citi point is that it shows that an increase in Chinese demand for seaborne iron ore doesn't necessarily mean an increase in total Chinese demand. You would want to see steel production increasing in a similar fashion in order to claim that higher Chinese ore imports were a sign of growth. So while other green shoots may exist in the world, higher Chinese seaborne iron ore imports YTD isn't one of them. This also sheds some light on the recent BDI rally and why it may be a fake-out.