Iron Ore to trade at $110 as Chinese investments keeps demand high – ANZ

The iron ore market has been well supported by ongoing supply issues and a robust Chinese steel market. Even though these issues are abating, sentiment remains strong, as the steel industry looks towards further support from stimulus measures in China. Iron ore prices are likely to remain high until there is real evidence of stimulus measures being eased. Economists at ANZ Bank have updated their target to $110/t and only see prices easing back below $100/t towards the end of the year.

Key quotes

“Sentiment remains positive in the iron ore market as stimulus measures in China promise to keep demand strong. The July Politburo meeting suggests a clear policy intention to speed up infrastructure investment in H2 2020.” 

“We expect China’s annual steel production to exceed 1B tonnes this year. That would amount to a growth rate of 4.8%, up from our original forecast of 1.5% growth at the start of the year. This should see the iron ore market remain tight in H2 2020.”

“We forecast the market will remain in deficit in Q3, before a pickup in demand and some seasonal weakness in demand push the market into a small surplus in Q4. This is unlikely to result in a sharp price correction if investors are convinced that China’s central government will release more stimulus.”

“We have updated our 0–3m target to $110/t and only see prices easing back below $100/t towards the end of the year.”


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.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD edges above 1.18 amid mixed US data, slim stimulus hopes

EUR/USD is trading above 1.30 after US Durable Goods Orders beat expectations but Consumer Confidence missed estimates. Hopes for a US stimulus deal are slim with a week left until the elections.


GBP/USD stabilizes above 1.30 amid Brexit and covid uncertainty

GBP/USD is hovering above the round 1.30 levels as rising UK COVID-19 cases, uncertainty about Brexit, and PM Johnson's political problems weigh on sterling. US data has been mixed.


XAU/USD ticks up to $1,910 and turns positive on the day

Gold futures have found support right below the $1,900 area earlier today before inching up to $1,910, turning positive on daily charts. The precious metal lost ground, with the US dollar building up during the European session on Tuesday, to appreciate during the North American session with market sentiment improving moderately.

Gold News

Bitcoin breaks new yearly highs; the road to $15,000 is clear

Bitcoin breaks new yearly highs and hits $13,464. The road to $15,000 is clear as there are no major resistance levels above the current price.

Read more

WTI trims losses and moves near $39.00/bbl ahead of API

Following two consecutive daily pullbacks, prices of the West Texas Intermediate regain some buying interest and reach the $39.00 mark per barrel on turnaround Tuesday.

Oil News