Base Metals
Iron Ore Futures to Rise as China Eases Zero-COVID
China’s steady easing of COVID-19 restrictions finally allowed the beleaguered economy to begin reopening. Many experts expect a renewed demand for steel,…
China’s steady easing of #COVID19 restrictions finally allowed the beleaguered economy to begin reopening. Many experts expect a renewed demand for steel, which means an increased appetite for steel-making raw materials such as iron ore. Both analysts and traders believe the lifting the restrictions was a step in the right direction. This current positivity is clear in the price of iron ore futures, which have started climbing once again.
Ore futures rose this Monday after more cities in China eased their COVID restrictions. According to one report, Citi Group believes that the gradual reopening of the economy could propel iron ore prices as high as $150 a ton by June 2023.
In the past month, iron ore prices have enjoyed a significant rise and fresh advancements. According to the report, this prompted Citi to upgrade its forecast for Australia’s top export. The organization also projects that iron ore will reach $120 on a three-month horizon, from its previous price of $110. However, if China initiates even more credit easing up measures, Citi claims ore prices could rally towards $150 a ton in the next three to six months.
Get weekly updates on trends in iron ore futures as well as other commodity news with MetalMiner’s free weekly newsletter. Click here to learn more. Want to master metal prices? Read our latest insider article.
India Set to Benefit From China’s Initiatives
China’s sudden motivation is also good news for neighboring India. A few days ago, the Indian government withdrew an export duty on iron ore lumps and fines of less than 58% Fe. Back in May, the government levied export charges varying from 15% for steel exports to around 50% iron ore (including concentrates), which no doubt impacted iron ore futures. Steel prices in domestic markets have been falling ever since.
Now, reports emerging in India reference China picking up large volumes of low-grade Indian iron ore in the coming weeks. This is largely due to Chinese steelmakers seeking cheaper raw materials to cope with meager profits.
A report in The Hindu Businessline detailed that traders and analysts were looking to resume buying from India after six months of suspension. In fact, one subset of traders believed that there was still room for prices and iron ore futures to rise. They cited demand for low-grade iron ore fines and pellets, which has received support from steelmakers’ incentives to bring down costs.
Looking for metal price forecasting and data analysis in one easy-to-use platform? Inquire about MetalMiner Insights today.
Iron Ore Futures Impacted by Price Gaps
The report also detailed how Chinese steelmakers were already increasing the ratio of low-grade iron ore. Their primary goal was to cut down on production costs, thus pushing up the price of the cheaper ores. These days, the gap between high and low grades is less than $40 a ton. This is down from nearly $90 a ton in March and the lowest since April 2021.
Meanwhile, the Indian government’s decision to withdraw export duty comes when India’s steel exports were down 66% (in October), the highest for this fiscal. As iron ore futures rise, experts on all sides continue to watch the Asian markets closely.
Overwhelmed by shifting market dynamics? Improve metal purchase timing and mitigate price risk with a comprehensive outlook. Click to trial MetalMiner’s monthly metal buying outlook.
White House Prepares For “Serious Scrutiny” Of Nippon-US Steel Deal
White House Prepares For "Serious Scrutiny" Of Nippon-US Steel Deal
National Economic Adviser Lael Brainard published a statement Thursday…
How to Apply for FAFSA
Students and families will see a redesigned FAFSA this year. Here’s how to fill it out.
Dolly Varden consolidates Big Bulk copper-gold porphyry by acquiring southern-portion claims – Richard Mills
2023.12.22
Dolly Varden Silver’s (TSXV:DV, OTCQX:DOLLF) stock price shot up 16 cents for a gain of 20% Thursday, after announcing a consolidation of…
-
Energy & Critical Metals3 months ago
Tesla Launches New Mega Factory Project In Shanghai, Designed To Manufacture 10,000 Megapacks Per Year
-
Companies3 months ago
Dolly Varden consolidates Big Bulk copper-gold porphyry by acquiring southern-portion claims – Richard Mills
-
Uncategorized3 months ago
Gold Hunter Sells Newfoundland Assets For $15 Million In Shares
-
Base Metals3 months ago
PNNL researchers synthesize copper-graphene composites to improve electrical performance of copper; ShAPE
-
Uncategorized3 months ago
Closing Bell: Benchmark fails to fire on Friday, but ends only a few points lower in a lovely Christmas red
-
Companies3 months ago
Brunswick Exploration (TSXV:BRW) Reports High-Grade Lithium Intersected in Mirage Project’s South Zone Drilling
-
Base Metals3 months ago
China Restricts Rare-Earth Technology Exports
-
Economics3 months ago
Crypto, Crude, & Crap Stocks Rally As Yield Curve Steepens, Rate-Cut Hopes Soar