Global iron ore short-term outlook April 2022

Iron ore took a big hit in the final week of April as heightened concern over supply chain disruption and inflationary pressure provoked a market wide sell-off. But having started the month at $160/t and finished at $140/t, April’s average of $151/t was still the highest monthly value since August 2021. As far as monthly average prices are concerned, we believe this is as good as it gets in the current mini-cycle. Our H2 forecast is $130/t, marginally below a projected $140/t for H1. Beijing’s balancing act between human safety and economic stability remains the key short term driver of iron ore. We know from recent experience that Chinese iron ore demand has potential to bounce back quicker than the broader economy if steel intensive infrastructure is prioritised in the government’s economic kickstart programme, but on balance we feel that seaborne supply and demand will become more closely aligned as the year progresses and prices will trend lower.