Iron ore weakness to continue into 2025 and beyond, says Fitch Solutions’ BMI
Looking beyond 2024-2025, BMI analysts maintained their view that iron ore prices will likely follow a multi-year downtrend.
Iron ore prices continued to drop on Tuesday due to increasing domestic supply in China and ongoing concerns about demand, which have been exacerbated by a prolonged downturn in the property market, leading to a decline in investor confidence.
According to Fastmarkets, benchmark 62% Fe fines imported into Northern China fell 1.43% on Tuesday, to $123.04 per ton.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange ended daytime trading 0.69% lower at 862.5 yuan ($118.19) a metric ton, after falling 0.2% on Monday.
The benchmark October iron ore on the Singapore Exchange fell 0.87% to $120.7 a ton as of 0655 GMT, recouping some losses from earlier the session and staying above the pivotal level of $120 a ton.
“We see it as normal downward correction after touching the resistance level,” said Cheng Peng, a Beijing-based analyst at Sinosteel Futures.
“It’s risky to build long positions at a price range between $120 and $130 per ton.”
Higher domestic supply weighed on the key steelmaking ingredient, with output of run of mine totalling 659.17 million tons in the Jan-Aug period, up 7% year-on-year, data from the National Bureau of Statistics showed on Monday.
Concerns over the property market also persisted, despite a temporary relief after embattled Chinese developer Country Garden won approval from creditors to extend repayment on another onshore bond.
($1 = 7.2975 Chinese yuan)
(With files from Reuters)
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