International Watch
GLOBAL
Souring iron ore outlook set to persist into 2022
T
he outlook for iron ore prices has soured as China slashed steel production, one of its largest property developers defaulted and the country advanced its work to decarbonise its economy. Iron ore prices plummeted through August, falling about $100 per tonne to as low as $94/t by mid-September for S&P Global IODEX 62% Fe and near $100/t for NYMEX 62% Fe after China called for caps on steel output as it sought to cool prices in metal markets and decrease pollution from the steel industry. They had traded at over $200/t until late July in part due to strong Chinese steel production in the first half of the year amid economic growth of 12.7% in China.
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SEIFSA NEWS
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“We’re going to see prices struggle and go back to around the $100/t level,” said Tom Price, head of commodity strategies at Liberum Capital, commenting on fourth-quarter expectations. S&P Global Market Intelligence dropped its fourth-quarter forecast to $110/t from an earlier forecast of $145/t. “The demand and price outlook is a lot weaker,” S&P Global Market Intelligence analyst Ronnie Cecil said. Prices could slide further as iron ore output typically increases in the back half of the year, Cecil said.
SEPTEMBER / OCTOBER 2021
