Commodity Market Report

Iron ore markets short-term outlook February

28 February 2022

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28 February 2022

Iron ore markets short-term outlook February

Report summary

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.

Russia and Ukraine – their role in the global iron ore market
Rising tension, rising uncertainty
Technical perspective
High grade ore, lump and pellet
Chinese steel bounces back in February
Outlook for Q2 looks promising
Uncertainty for Chinese imports
A challenging year ahead for seaborne supply
Short term outlook for Brazilian supply
Short term outlook for Australian supply
India – exports gaining momentum
Iron ore port inventories up but will start to draw down as the construction season approaches
Dry bulk freight market recovering from seasonal weakness