Global iron ore short-term outlook October 2022

Iron ore price slumped to US$80/t at the end of October on increasing concerns about the global steel outlook. Covid-19 and a property sector slowdown continue to weigh down demand sentiments further in China. Weakness in steel demand ex-China is also emerging. Supply side issues have limited the downside so far, but sentiment has weakened significantly in recent weeks. It appears that China’s pro-growth efforts’ upside potential to current prices have moved further out into 2023. However, we believe sentiment is at a floor, and we expect China’s economy to gradually improve into 2023. Iron ore fundamentals will improve as macroeconomic support policies come into force.