Divergent Prospects for Iron Ore Prices in the Second Half of 2024
[tintuc]
Amid concerns about the mismatch between supply and demand, businesses in the industry have divergent views on the outlook for iron ore prices in the second half of 2024.
Optimistic Viewpoint
Mengtian Jiang, Chief Iron Ore Analyst at Horizon Insights, expressed optimism about iron ore prices. At an industry event in Singapore, she noted:
- Iron ore prices could reach $140/ton by the end of this year.
- The current imbalance between supply and demand is only a temporary trend.
- The overseas inventory replenishment cycle is one of the main drivers of prices.
- The issuance of special bonds by the Chinese government in June will translate into actual steel demand for factories in the third quarter.
- Support from the manufacturing and export sectors exists despite weaknesses in China's real estate sector.
Pessimistic Viewpoint
Anant Jatia, founder and Chief Investment Officer of Greeland Investment Management, has the opposite view:
- Iron ore prices could fall below $118/ton.
- China does not have many opportunities to stimulate the economy as expected.
- Suppliers from India will increase production and exports when prices exceed $120/ton, capping iron ore prices.
- The recovery of China's real estate sector will take time.
- The Chinese government's ability to stimulate the economy is quite limited.
- Weak steel profit margins challenge the outlook for high-grade iron ore demand.
Neutral Viewpoint
Sunny Wajid, head of trading at Fomento Commodities, predicts iron ore prices will stabilize within a certain range:
- Iron ore prices will fluctuate within a range of $10-15/ton from the current level.
- The outlook for iron ore prices depends on hot metal production.
- Steel demand in China may remain unchanged.
- Once prices fall to $100-110/ton, the market is likely to stabilize as supply may decrease.
Conclusion
The outlook for iron ore prices in the second half of 2024 is currently contentious among experts and industry businesses. Some believe prices will rise due to demand stimulation from China, while others predict a decline due to limited economic stimulus and increased production from other suppliers. However, the average price is expected to fluctuate within a stable range, depending on adjustments in supply and demand in the market.
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