The Commonwealth Bank of Australia (CBA) has stated that steelmaking and demand in China will increase in the first half this year with the easing of Covid-19 measures, though it also forecasts that this increase will not be sustained through the second half due to the country’s conservative economic policy announced in March.
The CBA expects iron ore prices to be at $100/mt this year and to decrease in the long term amid plans to centralize iron ore procurement under the leadership of the state-owned China Mineral Resources Group (CMRG). CMRG, established in 2022, will purchase iron ore worth $160 billion for about 20 major Chinese steelmakers this year, with the purpose of decreasing iron ore prices, accelerating Beijing’s efforts to increase control over the natural resource.
Meanwhile, the Australian government’s Department of Industry, Innovation and Science has forecast that the benchmark iron ore price will average at around US$100/mt in 2023 and at around US$63/mt in 2028, as SteelOrbis previously reported.