Iron ore markets short-term outlook December 2021 Report

Commodity Market Report 20 December 2021

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Report summary

Having started the month at $100/t CFR, the 62% index had rallied above $120/t at the time of writing. The catalyst to this latest mini-rally is China's policy easing measures in response to the recent growth slowdown. But not much has changed in terms of short term supply/demand fundamentals: Chinese blast furnace iron production remains constrained by restrictions ahead of the Beijing Winter Olympics in February 2022 and high stocks of imported ore at Chinese ports look set to rise further in January. Meanwhile in the world ex-China the recovery is losing momentum and investment decisions remain hindered by uncertainty regarding the economic damage caused by the fast spreading Omicron variant. On balance we see more downside than upside risk for iron ore in the short term and would not be surprised to see December's price gains reversed in January.

Too much too soon?
A strong finish to a turbulent year
Technical perspective
High grade ore, lump and pellet
Supply slides
- Short term outlook for Brazilian supply
- Short term outlook for Australian supply
- India - a milestone year
- Global demand registers first annual fall since 2016
- In China sentiment gets a policy induced boost
- Chinese imports of iron ore surged in November
- Port inventories rise as demand remains weak
- Dry bulk freight market trades in a narrower range