Column: Iron ore demand recovering outside China, but will it be enough?: Russell

On the bearish side is some restrictions placed on steel production in the major Chinese producing city of Tangshan in order to combat air pollution, although these measures are likely to be only temporary in nature.

Rising port inventories in China, which buys about 70% of global seaborne iron ore, are also leading to caution over prices, especially since supply from top exporters Australia and Brazil seems robust enough.

And a further question is just how much steel will China require this year, with industry expectations centring on a small increase on last year’s record production of just over 1 billion tonnes, but others question whether Beijing will provide as much stimulus in 2021 as it did during last year’s coronavirus pandemic.

On the bullish side are signs that seaborne iron ore demand outside of China is rising, as economies in Europe and Asia start to recover from the economic hit from the pandemic.

The spot price for benchmark 62% iron ore delivered to China, as assessed by commodity price reporting agency Argus, ended at $164.35 a tonne on Wednesday, up slightly from the previous day’s close of $164.25.