Daily iron ore price update (stockpiles mount up)

Friday saw iron ore prices zoom to a new seven week high, putting in a fourth straight weekly gain, as hopes about a recovery in steel demand fostered speculation on Chinese markets. Dalian futures also rose, almost hitting $700 intrasession while rebar bounced back. However, reports that stockpiles of imported iron ore rose above 156 million tonnes at the end of last week – the highest since July 2018 – is likely to temper speculation into the new trading week.

ANZ reckon commodity markets are “normalising” following very high volatility due to power shortages and “shifting Chinese regulatory measures”.

For the steel market, in particular, the stabilising construction activity in China also helped lift the overall mood, they said.

“This supports steel demand, though the backdrop remains challenging for iron ore until February 2022,” they wrote in a note.

With China expected to ensure smog-free skies while hosting the Winter Games in February, tight steel production controls are likely to remain in place next year, putting a cap on iron ore demand.

China’s iron ore port stockpiles, partly due to weaker offtakes from steel producers, may thus continue piling up.

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Comments

  1. Diogenes the CynicMEMBER

    Chinese New year is normally late January / early February so probably will coincide with any shutdown for Winter Olympics. Production used to pretty much shutdown in southern China for 3 weeks before and after CNY. In 2022 it is 1st February – Year of the Tiger.

  2. And yet iron ore price goes up? With steel production shuttered, Chinese Ponzi property developers going to the wall and Chinese house prices falling?? WTF?