Iron Ore Spot Price, page-2

Now lets hear from the Professionals at JP Morgan....

Chinese steel industry seen keeping iron ore above $US100/t for two more yearsSean SmithThe West AustralianTue, 15 December 2020 5:43PMSean Smith

https://thewest.com.au/business/chinese-steel-industry-seen-keeping-iron-ore-above-us100t-for-two-more-years-ng-b881749277z

Investment banking giant JP Morgan is tipping iron ore prices to remain above $US100 a tonne for at least two more years on Chinese demand that may not peak until 2025.As China tries to rein in prices, complaining the market has failed, JP Morgan ramped up its forecasts for the commodity by up to 21 per cent and now sees iron ore averaging $US126/t next year and $US110/t in 2022.The group’s global commodities analysts said while last week’s highs of up to $US160/t looked unsustainable, “we believe materially higher near-term forecasts are justified on market tightness”.Constraints on Brazil’s iron ore production was a factor in the revised forecasts. However, they mainly relied on a bullish view of China’s steel industry, which is seen expanding to meet the country’s growing economy over the next five years.JP Morgan sees Chinese steel production rising three per cent next year and then two per cent a year until peaking at 1.18 billion tonnes in 2025, up an estimated 130mt on 2020’s expected production. The outlook is based on China’s economy growing at 8.6 per cent next year before slowing to 5.3 per cent out to 2025.While spot prices traded at near $US154/t yesterday, Singapore-traded iron ore futures lost ground for a second consecutive day to $US148/t as concerns about Chinese intervention in the market again overshadowed the country’s robust steel output.This month’s price surge has swelled profits at Australia’s iron ore miners, but increased costs at Chinese steel mills.The China Iron & Steel Association, which represents the country’s top steel mills, wants Chinese regulators to investigate the rally and prosecute any wrongdoing.JP Morgan’s report came as Morgan Stanley said iron ore was trading “ahead of fundamentals” but admitted there were limited barriers in its path.