Commodity Market Report
Global iron ore short-term outlook August 2019
Report summary
Iron ore’s long anticipated price correction finally arrived in August – and came spectacularly! Daily spot prices for 62% Fe iron ore fines shed almost US$45/tonne in a little over eight weeks. Average prices have fallen 25% month-on-month. The correction brings 62% Fe fines indices inline with our fundamental analysis. But why did the price decline happen so dramatically? And where will prices go next? Whilst supply is improving announcements from BHP, Vale and the Indian state of Odisha suggest further disruptions are possible. And on the demand side, Chinese steel production restrictions pose risk to our view. It has been a dynamic six months for iron ore, and although prices might seem like they are back where they belong, there is plenty of scope for volatility in Q4.
Table of contents
- US-China trade war intensifies
- Supply picks up but further disruptions possible
- Iron ore mine lease auctions delayed in Odisha
- Extent of financial gain from price increase revealed
- China's ironmaking momentum shows signs of cooling...
-
...But hot metal demand will remain supported!
- Construction steel demand shows resilience
- Loss-making EAF producers sacrifice market share to integrated steelmakers
- September production cut plan falls short of expectations
- Will domestic supply expansion be resilient facing falling iron ore prices?
- Iron ore prices back to a sustainable level
- Modest widening of prices spreads expected in the short term
- Dry bulk freight market
Tables and charts
This report includes 16 images and tables including:
- Nine months of iron ore prices: do they finally reflect the fundamentals?
- Contestable market supply and demand
- Key quarterly forecast
- Quarterly 62% Fe fines forecast and quality spreads
- Capesize spot freights, US$wmt, to China (Beilun/Baoshan)
- Iron ore inventory at Chinese ports, by source
- Utilisation rate at Chinese iron ore mines
- Trade of iron ore, monthly volume
- Trade of iron ore, y/y change
- Steel production, monthly y/y growth
- BF utilisation rate in Tangshan, China
- Quarterly indicators: iron ore trade, crude steel and hot metal production (Mt)
- Annual iron ore exports forecast by country/region
- Annual iron ore imports forecast by country/region
- Annual hot metal output forecast by country/region
- Quarterly iron ore production - selected companies (Mt, 100% basis)
What's included
This report contains:
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