Iron ore markets short-term outlook November 2021 Report

Commodity Market Report 30 November 2021

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Report summary

The year-end price slide we signalled last month came sooner and sharper than expected. By mid-November the benchmark index had dipped below $90/t, dragging the monthly average down to an 18-month low of $95/t. China of course is the driver. The country's pig iron production is now on track to fall by at least 5% this year, wiping out almost the entire growth achieved in 2020. The near-term outlook is clouded by the timing of the Beijing Winter Olympics in February 2022. Stricter than normal winter curbs on sintering and steelmaking will delay any meaningful recovery in demand for iron ore until late Q1-2022. All this at a time of high and rising inventory of iron ore at Chinese ports suggests more downside than upside risk on a 3-month view.

Ending the year on a low
Back above $100 - but maybe not for long!
- Technical perspective
- High grade ore, lump and pellet
Ending the year on a low
- In China last year's gains = this year's losses!
- Short term prospects for supply and demand remain bleak
- Chinese imports of iron ore - on track to fall by 60 Mt
Positioning for the future
- Short term outlook for Brazilian supply
- Short term outlook for Australian supply
- Indian exports plummet as margins shrink
Iron ore port inventories continue to build
Freight – dry bulk freight market normalises