Posted on 16 May 2023
ANZ Research sees iron ore prices finding a floor near $95/tonne, Kallanish learns from its report.
“Muted steel demand from China’s property markets during the peak construction season is a key headwind for iron ore and coking coal demand,” the research house says.
It also says narrowing profit margins and a push to curb lossmaking steel plants will slow steel production growth in the second quarter.
Further, it says the increased amount of steel produced using the electric arc furnace process is reducing demand for iron ore.
According to the research house, iron ore prices have been under pressure amid weak demand from China’s steel industry.
“Initial hopes of strong demand have evaporated as the real estate market chips away at a mountain of debt,” it says.
It notes that China’s steel industry purchasing managers index (PMI) hit 45 in April, its lowest level since December 2022.
“Exports are now rising amid the softness in the domestic market. Without additional fiscal stimulus, growth in steel demand is likely to remain weak,” it says.
Source:Kallanish
