Global iron ore short-term outlook December 2023

Despite near-term concerns around downstream demand as China enters its weak construction season during the winter, prices have continued to trend higher. December prices averaged US$134.9/t as of the time of writing, up by US$4.2/t month-on-month, as sentiment remains positive on the expectation that Beijing will support the economy with further stimulus measures. This excess price positivity caught the attention of Chinese authorities and caused investigations into what they consider unreasonably high prices. While the influence of market supervision is now waning despite its initial effectiveness at price control, we still see the current bullish sentiment being at the mercy of rising concerns over a soft growth outlook in China.