Ivan, we’re sorry we laughed at you. When Ivan Glasenberg, head of the world’s biggest commodities trader, Glencore, said last August that he couldn’t read China – and nor could anyone else – it wasn’t the most comforting look.
Some of Ivan’s rivals were quick to disagree. “We don’t find China impossible to read,” BHP Billiton chief executive Andrew Mackenzie said a few days later. But seven months on, it’s clear that understanding China, at least in the short term, has become extremely difficult.
Indeed, when asked about long-term demand for iron ore at the company’s results last month Rio Tinto chief Sam Walsh pointed to recent comments by President Xi Jinping, and had to admit that “nobody quite understands what the new normal means”.
When AFR Weekend asked Glasenberg this week about whether he felt vindicated, he said that “with hindsight we were proved correct.
“What I said at the time is, China is hard to read on a short-term basis. You never know what lever they are going to pull from one day to the next,” he said.
Take the iron ore price as an example of why no one trusts the short term. It’s risen 23 per cent since the start of the February, but a spate of data has shown China’s steel sector is in deep trouble, and iron ore stockpiles are reportedly rising. In short, everything suggests that iron ore should be falling.
For the rest of this article, click here: http://www.afr.com/business/mining/we-are-sorry-we-laughed-at-you-on-china-ivan-glasenberg-20160303-gna6jb