Industry players offer diverse iron ore price outlook
Industry players are mixed on the iron ore price outlook for the second half of 2024 amid concerns over a supply and demand mismatch.
"We are actually quite bullish about the price of iron ore in the second half of the year. We think the mismatch of supply and demand, which has brought down the iron ore prices currently, is just a temporary trend," Horizon Insights iron ore chief analyst Mengtian Jiang said at an industry event in Singapore last week attended by Kallanish.
She opined that iron ore prices may go up to $140/tonne at the end of the year. According to her, the replenishment cycle of overseas inventory is one of the two key driving factors.
Moreover, the Chinese government's special bond issuance, to be carried out by June, will translate into actual steel demand for plants during the third quarter. This will in turn boost iron ore prices.
Despite the weaknesses in the real estate sector in China, Mengtian noted there is still support coming from the manufacturing and export sectors.
On the contrary, Greeland Investment Management founder and chief investment officer Anant Jatia said he is bearish on iron ore prices and expects values to fall below $118/t.
"I don't think China has room for stimulus as much as people are expecting. Besides, suppliers in India will increase their output and exports as prices go beyond $120/t. That's going to keep a lid on the prices," he observed.
He also noted the recovery of China's real estate sector will take a long time, and the capability of Chinese government to stimulate the economy is fairly restricted.
"We think the Chinese government measures to boost the real estate sector are not enough. Steel margins have continued to be weakened for an extended period of time. If you don't see margins improving, it is very hard to see demand for iron ore picking up," he added. Given the weakness in steel margins, the higher-grade iron ore outlook will be challenging.
Fomento Commodities head of trading Sunny Wajid, on the other hand, foresees iron ore prices being bound within a $10-15/t range from their current level.
According to him, the price outlook for iron ore will depend on hot metal production. Steel demand in China is likely to stay flat, he noted.
"Once the prices go down to $100-110/t, there is a possibility that the market may stabilise, because the supply may be decreased," he concluded.
Truly global, user-friendly coverage of the steel and related markets and industry that delivers the essential information quickly while delivering on most occasions just the right amount of between-the-lines comment and interpretation for a near real time news service of this kind.
Anonymous
Very good overview of the weekly steel market.
Anonymous