Economics
Iron's Jekyll-and-Hyde Moment Shows This Rally's `Dangerous'
- Westpac’s Smirk says prices have advanced beyond fundamentals
- ‘I think we’re actually in a Hyde environment,’ Smirk says
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Iron ore’s latest rally has run beyond fundamentals and there’s a risk of a sharp reversal as prices tumble back below $50 a metric ton next year, according to Westpac Banking Corp. Senior Economist Justin Smirk, who says the raw material has something of a split nature.
“Most commodities are pretty Jekyll-and-Hyde,” Smirk said in an interview. “Iron ore does fit that trend. Hyde is meant to be angry, Jekyll is meant to lovely and nice,” he said, referring to the principal character in Robert Louis Stevenson’s 19th century classic who struggles with a dual personality.