Prices of iron ore are expected to fall as Chinese steel production is projected to stall next year, reports SCMP. Nonetheless, analysts are optimistic that aggressive speculation through iron ore derivative trading could correct the outcome.
- The projected decline in iron ore prices is also supported by non-Australia miners such as Brazil, China’s second-largest source market, resuming full production.
- Iron ore demand could also ease in 2021 on increasing input of steel scrap, environmental pressures, and low-carbon development in China.
- Iron ore prices hit a record US$171 a tonne on Monday after a dip to about US $153 a tonne last week after China Iron and Steel Association (CISA) held talks with Australia’s world’s biggest miners Rio Tinto and BHP.
- Australia projects iron ore prices to remain above US $100 a tonne until mid-2021 and fall to around US $75 by the end of 2022
- Analysts have warned that the trade conflict between China and Australia could see the former clamping down on the latter’s’ iron ore imports, raising the market price.
- China imported 1.04 billion tonnes of iron ore in 2019, with 660 million tonnes from Australia, mainly via Rio Tinto, BHP, and Fortescue Metals Group.
Iron Ore futures are currently gaining. FEF1! is up 0.13%