Iron Ore to continue inching towards $250 by year-end – OCBC

China is shifting towards a green economy and in doing so, is encouraging more domestic steel consumption over steel exports. Subdued prices in the next six months may be expected as a result of active government intervention, but Iron Ore may test $250/mt when Chinese buyers look to replenish depleted stockpile, as reported by OCBC Bank.

Chinese buyers to replenish iron ore inventories in 2022 as current stockpiles deplete

“The key changes that we continue to expect are the encouragement of a) more scrap steel imports; b) higher domestic consumption of steel vis-à-vis export market sales. In short, we expect China to import less iron ore while encouraging a higher recycling rate of steel domestically, via reduced steel exports and higher foreign scrap steel purchases.”