FOCUS: 4 reasons why iron ore prices could sustain above $200 per tonne

The iron ore market price has broken several records in 2021, with sky high prices for various iron-ore brands emerging even before the half-year mark - such as the iron ore 62% Fe index surpassing $200 per tonne on May 6 - so market participants are now wondering how long the index can remain above $200 per tonne.

The firm prices have also prompted the spread between 65% Fe and 62% Fe iron ore fines to reach a historical high in March.
At least four drivers have emerged that will support iron ore prices, with most market participants thinking that spot prices will likely keep firm until, at least, the end of the first half of the year.
1.Strong economic recovery prompts firmer demand for steel
Finished steel products have been enjoying firm prices in a market environment where demand is outweighing the supply, especially amid ongoing curbs to steelmaking and production cuts.
“Supply and demand fundamentals are unlikely to change in the short term. China is still hungry for steel products, especially [because it was] probably the first major economy to recover after suppressing the spread of Covid-19,” a Singapore-based trader said.

China had been especially swift in preventing a resurgence of Covid-19, the Singapore-based trader...

Published

Alex Theo

May 20, 2021

10:06 GMT

Singapore