RESEARCH: Supply boost threatens iron ore price spike

The latest forecasts from Fastmarkets’ team of analysts are ready to view.

  • Iron ore remains the most bullish commodity of the year, with prices fuelled by Chinese demand and supply disruptions in Brazil, along with bullish sentiment. But prices are expected to come down because Brazilian exports have begun to recover, and have reached their highest level since the Brumadinho dam disaster in 2019. With more mines now in operation, Vale is able to produce 1 million tonnes per day, and we expect this upsurge in Brazilian production to be sustained. If Australian suppliers continue to operate without disruptions, the current high iron ore prices will come under further pressure.
  • Port stocks have been rising and blast furnace utilization rates have been stagnating, suggesting there is limited room for further price rises. Curbed steel raw material demand is also reflected in the declining freight rates into China, with China’s import ban on Australian coal likely to have increased vessel availability in the basin.
  • But Chinese iron ore demand has remained resilient amid high crude steel output levels, so we do not expect to see a sharp downward correction in iron ore prices. We believe direct-feed iron ore products such as blast furnace pellet face the strongest upside risks to prices this quarter. This is because the demand for these products is boosted by rising domestic coking coal prices, sintering restrictions and pollution curbs imposed by Chinese authorities.
  • The strong demand pull from China has also helped to strengthen the prices for merchant pig iron (MPI). China has been importing significant amounts of this material since mid-2019 amid its relative price attractiveness over domestic scrap, but the attractiveness has diminished recently. MPI trade into China may be restrained further if the Chinese authorities allow a resumption of ferrous scrap imports.

Click here to view the Steel Raw Materials Market Tracker in full.

Fastmarkets’ flagship global steel event, Steel Success Strategies, is running as an online conference on October 26-28, 2020. Register today to hear directly from Fastmarkets’ pricing experts and analysts, as well from some of the most important chief executive officers in global steel.

What to read next
The publication of Fastmarkets’ AG-PLM-0019 refined bleached deodorised (RBD) palm olein, cfr South China assessment for Thursday July 24 was delayed due to a reporter error. Fastmarkets’ pricing database has been updated.
Chinese corn import activity continued to be sluggish in June, dropping to 156,445 tonnes, down by 32,000 tonnes, 17%, from 188,542 tonnes in May, according to the latest data from the country’s General Administration of Customs (GACC).
India’s ferrous scrap imports have rebounded in early 2025 but remain vulnerable due to competitive domestic DRI prices and shifting sourcing strategies by steelmakers. While near-term demand is subdued, long-term prospects depend on evolving supply chains and policy decisions.
China’s push for greener ferro-alloy production has revealed a significant divide between its northern and southern regions due to contrasting access to clean energy, supply and demand dynamics and regulatory environments, according to market participants.
This strategic launch is designed to better delineate the relationship between these two competing steelmaking materials. The differentials offer the market a single reference price denoting the spread between Turkey import billet and No1 and No2 heavy melting scrap (80:20) and between Turkey import billet and shredded scrap exported from the US East Coast respectively. […]
Nickel pig iron (NPI) is a key feedstock material used for stainless steel production, and the CIF has grown to become one of the mainstream trading methods for the Chinese market. The proposed price assessment will allow Fastmarkets to bring more transparency to the Chinese NPI market. Fastmarkets has been tracking spot and DDP China […]