World’s Top Iron Ore Shipper Says Robust Prices Are Here to Stay

By

Krystal Chia

28 June 2020, 10:01 pm AWST

• Australia’s most-valuable export is holding above $100/ton
• Prices to be aided by strong China demand, then weaken in 2021

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In this article

IOE1

Generic 1st 'IOE' Future

747.50

CNY/MT

+3.50+0.47%

FMG

FORTESCUE METALS

13.85

AUD

+0.10+0.73%

RIO

RIO TINTO PLC

4,549.00

GBp

+11.00+0.24%

Top iron ore shipper Australia predicts elevated prices will stay for the rest of 2020 as Chinese demand strengthens and supply is slow to increase.

Iron ore surged past $100 a ton in the first half after disruptions in Brazil curbed shipments just as Chinese mills churned out a record volume of steel. Prices are expected to largely hold at current levels over the remainder of the year, albeit drifting slightly lower in the second half, the Department of Industry, Science, Energy & Resources said in a quarterly report. It boosted the forecast for this year by almost 30% and also raised its 2021 outlook.

“Chinese demand for iron ore has thus far proven to be relatively robust, despite the impact of Covid-19 and the shutdown of significant sectors of the Chinese manufacturing industry,” the department said. “At this stage, it is not expected that Chinese demand will fall significantly, though the ongoing decline of consumer spending in OECD nations will increase the dependence of the Chinese steel industry on domestic stimulus measures.”