Moody’s: Iron ore prices to increase amid tight supply

Wednesday, 06 October 2021 15:07:21 (GMT+3)   |   Istanbul

International credit rating agency Moody’s has stated that it expects iron ore prices to move gradually towards the average levels of $70-80/mt seen in 2016-19 beyond 2022. According to the agency, tight iron ore supplies will keep prices above their historical norms through 2022, although prices have retreated from their peaks earlier in 2021 as supplies have increased and demand growth has slowed down. Restrictions on steel production in China limit future demand growth for iron ore.

According to the statement, iron ore prices peaked at above $230/mt in May 2021 and then contracted. Average iron ore prices of over $170/mt this year were stronger than any time since 2008, but weakened to levels closer to $110-115/mt in September amid Chinese government efforts to curb commodity prices and inflation.

Meanwhile, Moody’s has upgraded the corporate family ratings of Russia-based Metalloinvest to Baa3 from Ba1. The steelmaker’s outlook remains stable.

According to Moody’s, the upgrade reflects Metalloinvest’s high profitability, abundant reserve base, and strong cash flow generation. The stable outlook underscores Moody's expectation that Metalloinvest will maintain strong liquidity and pursue a balanced financial policy over the next 12-18 months.

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