Global iron ore short-term outlook February 2022
The eyes of the world are focussed on the escalating crisis in Ukraine. Iron ore is not top of the list of strategically important commodities to be impacted, but the inevitable disruption to supply lines could have severe consequences for certain segments of the market. Most exposed are European steelmakers that import pellet from Russia and Ukraine. The pellet market was already tightening prior to the conflict but now looks tighter still. The other big story of the month is China's latest bout of rhetoric regarding potential intervention in iron ore purchasing and pricing mechanisms. It may all come to nothing, but has still spooked the market, with spot iron ore finishing the month well down from its peak. Military conflict usually brings heightened volatility to commodity markets and iron ore is not immune. We have raised our Q1 forecast to $135/t. All longer term forecasts will be revised with our Q1-2022 outlook report.