The ferrous complex reamins paralysed by the jaws.
Goldman has some intelligence from the ground.
Steel: steel demand is seen as reasonable to solid/stable, with ongoing weakness in property and infrastructure construction sectors being offset by strong demand from manufacturing, auto, shipbuilding, machinery and exports.
All steel mills we had meetings with are seeing the export market as robust, and have been targeting the Middle East, Central Asia, Southeast Asia, Africa and Latin America, with construction and equipment companies also seeing strong demand and exports from “One Belt, One Road” infrastructure projects which is material for steel demand with estimates of ~150Mt of “indirect” steel exports in addition to ~120Mtpa of finished steel exports.
There have been no material enforced steel production cuts with the consensus view that ‘anti involution’ in the steel industry is more focused on environmental factors and profitability, though some minor cuts have occurred recently in northern regions like Hebei due to air quality issues.
Iron ore: iron ore price is expected to hold at around ~US$100/t over the next few months on expected restocking by steel mills along with stockpile liquidity impacts from the BHP/Jimblebar supply issue with China Mineral Resources Group (CMRG).
The central buying organization CMRG continue to increase their market share (some say >50% of imports now) and market influence, by acting as a custodian and/or negotiator for volumes under Long Term Contracts (LTC).
Steel mills expect the iron ore price to soften slightly in 2026 (potentially byUS$5-10/t), partly due to the impact of Simandou supply entering the market, albeit still projected to remain range bound (US$90-105/t) for the next two years with the top end driven by CMRG stockpile selling and the US$90/t level from high cost tonnes exiting the market and Indian steel mill buying.
Meh. Indian iron ore imports are tiny. Roughly 10 m this year from 6mt last.
Moreover, as Indian exports are knocked out below $100, less will be needed.
It is interesting to note that CMRG is such a positive force for iron ore miners.
By stockpiling, it is preventing the price from falling by boosting short-term demand, then only releasing inventory when it is profitable to do so. Not to mention decreasing BHP supply.
No wonder iron ore is struggling to fall. CMRG is just another arbitrage middleman.
