Iron ore price, page-29750

I run 2 steel businesses in Sth east Asia - price of steel is ridiculous. This is not due to growth based demand. It is due to restricted supply as supply chain disruption has not recovered. Always remember, whether it be South East Asia or the Middle East, or even Africa smelters require labor that is only over the last 2 to 3 months starting to mobilize following their forced repatriations during covid. It takes a good 2 to 3 weeks for migrant workers to return to work (in general locals are not willing or capable to work in smelting divisions). There are significant delays in the deliveries of consumables and spare parts. This is the fact - the price of steel is expected to rise. Just in March local prices went up 3 times. Manufacturers have stopped taking orders as now 2 to 3 months of orders fulfilled but it gets cancelled as prices and costs increase. I had order a large consignment of HRC trot 634 usd per tonne 4 months ago. As prices increased they concocted stories about manufacturing issue even though and wanted to cancel LC. However we compromised with pricing.
I personally would be very surprised to see a significant drop in IO this year. I think lowest we might go is 130 usd. We might see this in April as there is Ramadan and festivals or holidays kick in April with monsoon seasons in May. My point is unless China reduces steel consumptIon significantly as there is insatiable appetite in the region, the iron ore prices cannot just drop as buyers will step up. This is the reality created post covid. Now how long will this take to return to normal - as vaccines roll out and quarantine periods ease, the supply chain recovers and supply returns to normal only then will prices be restored. However when the prices do start dropping due to improvements in supply, it will head towards 90 usd in 2022. This is where fmg will thrive and it’s gradual divestment will c it rerated.