Chinese iron ore prices have certainly been on a roller coaster ride this year, hitting a record high in value terms after a period in which the price had risen and fallen sharply.
Futures on the Dalian exchange for delivery in January 2022 are now trading at RMB 777 per ton. That compares with about RMB 1,221 in May. However, prices are on the rise again, with futures climbing 50% in just the last three weeks.
Each month, MetalMiner hosts a webinar on a specific metals topic. Explore the upcoming webinars and sign up for each on the MetalMiner Events page. The next webinar is scheduled for 11:30 a.m. CDT, Thursday, Oct. 28.
Complicated iron ore dynamics
The market is facing all kinds of contrarian dynamics.
On the one hand, steel production is rising in many provinces following power and environmental shutdowns over the summer.
On the other hand, debt-laden property group Evergrande is just the (admittedly very large) tip of the iceberg that is the Chinese property market. That is a market Beijing is clearly intending to curb and bend to its will.
While arguably overdue, the fact remains, construction absorbs some 25% of Chinese steel production. A slowdown in the sector will have a profound impact on Chinese domestic steel demand.
Huge uncertainty surrounds where prices are likely to go.