Dutch-headquartered international bank ING has shared its iron ore price predictions for this year.
Accordingly, the bank stated that iron ore prices in China are closer to $100/mt and that concerns over the current crisis in the Chinese property sector have affected the iron ore market. Steel demand in the country keeps decreasing, while sentiments in the local property sector are still bearish. The Chinese government has delayed adopting a comprehensive stimulus package to revive the property sector and the usual increase in construction activity in the spring is yet to begin and so iron ore and steel inventories are climbing.
ING pointed out that iron ore inventories in China rose by 24 percent in the first quarter this year, which was the biggest quarter-on-quarter increase since 2014. Port inventories in the country are significant in terms of showing the supply and demand balance. Since the seasonal uptrend is yet to begin, the expected decrease in stocks may be delayed. The bank predicts that high iron ore availability in China will continue to put pressure on prices.
Additionally, downside risks are likely to prevail in the near term for iron ore prices amid subdued steel demand. China will continue to drive iron ore prices going forward, and the supply and demand balance will largely depend on China’s steel demand outlook. A further boost for China’s property sector will be crucial in supporting demand. The bank forecasts that prices will average $100/mt in the second quarter, with a 2024 average of $106/mt.