Commodity Market Report
Iron ore markets short-term outlook August 2021
This report is currently unavailable
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
Iron ore spot price fell 15% over the month of August to US$159/tonne at the time of writing. While we have been expecting iron ore prices to trend lower, the speed of the price contraction was impressive. Our analysis of market fundamentals shows support for iron ore prices at US$130/tonne. While technical indicators show prices should trade within a US$150-US$165/tonne range in the short term. Chinese announcements regarding the approach to balance economic growth and pollution concerns remain critical to the iron ore price trajectory. While improved iron ore supply availability will keep a lid on iron ore prices, this time of year – known as “Golden September and Silver October” – should provide support from what has already been a sharp correction. Overall, we are comfortable with our Q4 2021 price forecast of US$155/tonne, with prices declining to average US$125/tonne next year. However, there is more downside risk to prices now than at any other time this year.
Table of contents
- Where is the floor for iron ore prices?
- Market fundamentals support a price of US$130/tonne
- Technical price indicators also suggest support for prices at current levels
- Price spreads likely to favour high-grade ore
- Lump premiums plummeted but likely to find support because of sintering restrictions
- Chinese steel production curbs will dictate demand in H2
- Seaborne supply remains tight
- and Chinese domestic supply begins to falter as prices fall
- Strong Indian iron ore production backed by firm domestic demand
- Mine lease auctions commence in India
- Increased iron ore supply and Chinese steel production curbs contribute to higher Chinese p orts inventories
- Freight – rising shipments from Brazil combined with increased congestion in China push freight higher
Tables and charts
This report includes the following images and tables:
-
Key forecast dataCash cost curve (62% Fe) and demand62% Fe fines price (CFR China)
-
Key quarterly forecast62% Fe - Fibonacci Retracement Levels62% Fe Forward CurvesIron ore price spreadsLump premiumProduction cuts required to achieve no growth in 2021 crude steel productionPortside iron ore trading activity slowing down (kt per day)National blast furnace capacity utilisation rate stepping down (%)Chinese domestic mine utilisation rate dropped due to restrictions on mining activity
- 8 more item(s)...
What's included
This report contains:
Other reports you may be interested in
Insight
Fibres sustainability feed
Wood Mackenzie’s fibres sustainability outlook – a live feed of our latest research
$900
Insight
Perspectives - Metals and Mining - December 2025
A cross-commodity outlook
$1,050
Insight
LNG short-term webinar: November 2025
Monthly webinar covering topical LNG market themes
$1,050
