Iron ore prices will likely rebound over the next couple of months to 2024 despite their recent decline from a 5-month high of $122.2 a tonne in mid-September as the commodity has exhibited resilience against odds.

“Spot iron ore prices have been volatile in the September quarter, but generally moderated since the start of the year, driven by slowing global economic growth and China’s property sector weakness,” said Australia’s Office of the Chief Economist (AOCE). 

Research agency BMI, a Fitch Solutions unit, said despite China’s uneven economic growth, blast furnace steel production and iron ore demand have shown a defiance of all odds, through support from non-property sectors including shipping, machinery, autos and infrastructure.

Improved sentiment

“We expect some more upside to iron ore prices in the fourth quarter of 2023 ahead of the winter holidays as steel mills continue restocking,” it said.

ING Think, the economic and financial analysis wing of Dutch multinational services firm ING, said iron ore prices held above the $100-mark in August despite China’s worsening property crisis, which in typical years makes up about 40 per cent of demand. China has continued its efforts to boost the steel-intensive property sector, it said.

AOCE said despite the worsening outlook for global steel demand, iron ore prices strengthened again in September. “The resilience in prices appears to reflect improved market sentiment due to the potential for new government measures to support China’s economy,” it said. 

In the first half of 2023, total shipments for the four major exporting countries - Australia, Brazil, South Africa and Canada- were around 666 million tonnes, up 4.4 per cent compared with the same period in 2022.