• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 12 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 11 days Does Toyota Know Something That We Don’t?
  • 2 hours World could get rid of Putin and Russia but nobody is bold enough
  • 5 days America should go after China but it should be done in a wise way.
  • 21 hours "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)
  • 5 mins How Far Have We Really Gotten With Alternative Energy
  • 13 days China is using Chinese Names of Cities on their Border with Russia.
  • 21 hours The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
  • 2 days Even Shell Agrees with Climate Change!
  • 3 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 13 days CHINA Economy Disaster - Employee Shortages, Retirement Age, Birth Rate & Ageing Population
EU Member States Clash on Sanctioning Russian Aluminum

EU Member States Clash on Sanctioning Russian Aluminum

The EU considers banning Russian…

Wyoming Rare Earth Discovery Could Shake Up Global Markets

Wyoming Rare Earth Discovery Could Shake Up Global Markets

A significant rare earths reserve…

UK Trade Authority Probes Steel Import Quotas

UK Trade Authority Probes Steel Import Quotas

The UK's Trade Remedies Authority…

Metal Miner

Metal Miner

MetalMiner is the largest metals-related media site in the US according to third party ranking sites. With a preemptive global perspective on the issues, trends,…

More Info

Premium Content

Iron Ore Futures Jump As Chinese Cities Ease Covid Restrictions

  • Experts see renewed demand for steel as China reopens cities. 
  • Easing COVID-19 restrictions could send Iron ore as high as $150 per ton in by June 2023: Citigroup.
  • China is reportedly picking up large volumes of low-grade Indian iron ore in the coming weeks.

Via AG Metal Miner

China’s steady easing of covid-19 restrictions finally allowed the beleaguered economy to begin reopening. Many experts expect a renewed demand for steel, which means an increased appetite for steel-making raw materials such as iron ore. Both analysts and traders believe the lifting the restrictions was a step in the right direction. This current positivity is clear in the price of iron ore futures, which have started climbing once again.

Ore futures rose this Monday after more cities in China eased their covid restrictions. According to one report, Citi Group believes that the gradual reopening of the economy could propel iron ore prices as high as $150 a ton by June 2023.

In the past month, iron ore prices have enjoyed a significant rise and fresh advancements. According to the report, this prompted Citi to upgrade its forecast for Australia’s top export. The organization also projects that iron ore will reach $120 on a three-month horizon, from its previous price of $110. However,  if China initiates even more credit easing up measures, Citi claims ore prices could rally towards $150 a ton in the next three to six months.

India Set to Benefit From China’s Initiatives

China’s sudden motivation is also good news for neighboring India. A few days ago, the Indian government withdrew an export duty on iron ore lumps and fines of less than 58% Fe. Back in May, the government levied export charges varying from 15% for steel exports to around 50% iron ore (including concentrates), which no doubt impacted iron ore futures.  Steel prices in domestic markets have been falling ever since.

Now, reports emerging in India reference China picking up large volumes of low-grade Indian iron ore in the coming weeks. This is largely due to Chinese steelmakers seeking cheaper raw materials to cope with meager profits.

A report in The Hindu Businessline detailed that traders and analysts were looking to resume buying from India after six months of suspension. In fact, one subset of traders believed that there was still room for prices and iron ore futures to rise. They cited demand for low-grade iron ore fines and pellets, which has received support from steelmakers’ incentives to bring down costs.

Iron Ore Futures Impacted by Price Gaps

The report also detailed how Chinese steelmakers were already increasing the ratio of low-grade iron ore. Their primary goal was to cut down on production costs, thus pushing up the price of the cheaper ores. These days, the gap between high and low grades is less than $40 a ton. This is down from nearly $90 a ton in March and the lowest since April 2021.

Meanwhile, the Indian government’s decision to withdraw export duty comes when India’s steel exports were down 66% (in October), the highest for this fiscal. As iron ore futures rise, experts on all sides continue to watch the Asian markets closely.

By Sohrab Darabshaw

ADVERTISEMENT

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News