top of page
Search

Expectations positive for iron ore market in 2020: Platts survey

Most respondents see iron ore imports increasing in 2020, and prices averaging $70-$80/mt CFR China


Chinese steel demand seen to require ongoing support from government stimulus policies, but mill profit margins key to production levels


Market sanguine about steel production cuts over winter to reduce emissions, expects policy to be relaxed further


Steel market participants anticipate a strong year for iron ore demand and prices in 2020 on the back of improving steel margins and government stimulus, according to an Iron Ore & Steel Outlook Survey by S&P Global Platts.


A total of 80% of participants see iron ore imports increasing next year, with the four major producers - Vale, Rio Tinto, BHP and FMG - expected to lift exports in 2020. One steel mill in Shandong said steel production would increase as more new capacity ramps up, lifting demand for iron ore. No one surveyed said iron ore imports would fall in 2020.


Some 62% of participants expected iron ore prices to average $70-$80/mt CFR China, while 32% saw prices higher at $80-$90/mt. No one saw prices averaging beyond $90/mt.


The Platts 62% Fe iron ore fines (IODEX) benchmark has averaged $93.5/mt CFR over January-November this year, boosted by high seaborne prices over April-July.


The outlook for domestic hot-rolled coil -- the primary steel product used in manufacturing -- is extremely bearish, with two-thirds of those surveyed expecting profit margins of less than Yuan 200/mt ($28/mt).


The outlook is more positive for long steel product (such as rebar) margins as the property construction sector is expected to remain the major driver of steel demand.


Some 56% of those surveyed saw margins of at least Yuan 300/mt ($43/mt), with one-fifth seeing margins above Yuan 400/mt.


Considering the amount of market chatter around China's environmental policy over winter production cuts, it was noticeable that no one we talked to cited them as big impact on output.


More than 80% expected the restrictions on production to be similar to this year or relaxed even more.


A surprisingly large 37.5% said government stimulus measures would have the biggest impact on production.


Half of those surveyed said steel margins would be the biggest determining factor on steel production.


Overall, the survey indicates that 2020 should provide solid demand for iron ore but many market players expect government stimulus to help support steel demand.


Manufacturing is showing signs of recovery but the outlook for flat steel, such as hot-rolled coil, is pretty bearish.


As usual, the property construction sector will need to shoulder much of the steel demand burden and Beijing's efforts to tighten up borrowing by developers could start to put pressure on steel demand and prices next year.


Platts spoke to a total of 25 Chinese steel mills, domestic and international trading houses and iron ore producers in late November to get their views on the iron ore and steel market in 2020.


Source: S&P Platts

Recent Posts

See All

Hello from Alpine Metals

Thank you for taking the time to visit our website and blog. In our aspiration to serve our customers, we have come up with the idea of...

Comments


At Alpine Metals, we are committed to providing the highest quality structural steel products to our clients in the UAE and beyond. As a leading stockist of structural steel products, we have earned a reputation for excellence in the industry and are proud to be a trusted partner for many businesses.

Plot S10305, South Zone 1, Jebel Ali Free Zone, Dubai, United Arab Emirates

PO box 18077, Dubai, United Arab Emirates

  • facebook
  • googlePlaces

©2023 by Alpine Metals FZCo

bottom of page