Iron ore has been unable to escape the broader sell-off in commodities. However, low Chinese stocks and hopes of a China recovery over the second half of 2022 should provide support in the near term. The medium to long-term outlook is more bearish, strategists at ING report.
“While we expect iron ore prices to be supported in 2H22 due to expectations of a recovery in China, the longer-term outlook for iron ore is more bearish. On the demand side, it appears that China will continue to cap crude steel output whilst also looking to replace older steel capacity with electric arc furnace capacity in order to help the country meet its decarbonisation goals. We have already seen China’s iron ore imports peak in 2020.”
