Iron Ore Price = Chinese Real Estate FAI

Callum Thomas

Topdown Charts

If you care about the outlook for the iron ore price then you care about the outlook for the Chinese property market. A simple analysis shows that a major driver, if not the major driver, for the iron ore price is the pace of growth in real estate fixed asset investment in China. The chart below from the latest weekly report makes this clear.

The trouble is a couple of our leading indicators are pointing to a slowdown in property prices in China.  This along with still relatively high inventories of completed properties means, as a minimum, the upside for real estate fixed asset investment growth is logically capped.  But if property prices rollover, as they look like they will, it could mean a renewed slump in property investment and by extension demand for iron ore.  So we may well see the lows tested in the coming quarters ahead.


Callum Thomas
Head of Research
Topdown Charts

Callum is Head of Research at Topdown Charts. Topdown Charts is a chart-driven macro research house covering global Asset Allocation and Economics.

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.