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.
“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.”
