Iron ore faces headwinds as steel demand growth weakens – ANZ
|The wave of euphoria that lifted iron ore prices to record highs has ebbed. Focus is now on the downside risks, which should be enough to drag prices down in the short-term. Nevertheless, fundamentals are broadly positive, so economists at ANZ Bank don’t expect this to develop into a sharp sell-off.
Key quotes
“We expect Asian infrastructure and manufacturing demand to remain strong. Steel production should also benefit from environmental policies.”
“Some headwinds are gathering for iron ore. Restrictions on the property sector are likely to take the edge of steel demand growth. Weak margins for Chinese steel mills may lead to capacity reductions and Chinese authorities reinforcing supply side reforms.”
“We reiterate our 12-month price target of $100/t.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.