And Chinese stocks all through the steel industry, from iron ore to finished goods, which were built up in the expectation of a bigger stimulus package than has yet materialised, are now being run down, amplifying the downward price swing.

ECONOMIST: Iron ore

If things go well for U.S. Steel, the long equity position likely offsets whatever loss you would take on the CDS. U.S. Steel is far from immune to the price impact of Chinese demand, he says, and as a vertically integrated steelmaker it has exposure all along the process from iron ore to finished products.

FORBES: Blue Mountain's Andrew Feldstein: Three Ways To Play A More Volatile Steel Industry

The steel mill he bought in 1989 was part of Ford's great River Rouge plant, where the father of mass-produced cars turned raw materials into vehicles on a single site -- transforming ore and rubber into finished cars (see box, p.122).

FORBES: Man of steel

Tata, which mines all the iron ore and coal it needs, now aims to carry out primary steel production close to its iron-ore deposits, and then ship semi-finished steel for finishing close to foreign consumer markets.

ECONOMIST: Why the Tata-Corus deal makes sense for both parties