“Driven by high profits at mills… iron ore prices will rebound to some extent,” analysts with Huatai Futures wrote in a note, adding demand was hard to be sustained in the long run on cooling steel consumption.
“With iron ore inventory in China at a record high and as steel production keeps declining, we think the downward pressure on iron ore prices will persist,” CreditSights said in a report.
“China’s steel demand, which has been dragged down by weak property and infrastructure investment in the past few months, is now bottoming out,”
Expansion in production
China’s factory sentiment improved in November, according to Bloomberg.
The official manufacturing purchasing managers index rose to 50.1, the first time in three months it exceeded the 50 mark that signals an expansion in production. The non-manufacturing gauge, which measures activity in the construction and services sectors, fell slightly to 52.3. Both measures beat economists’ expectations.
“China’s manufacturing outlook remains stable as China maintains its advantage in global manufacturing supply chain amidst the ongoing disruptions and shortages,” said Liu Peiqian, China economist at NatWest Group Plc.
“However, the pace of growth may normalize in coming quarters as the demand outlook softens.”
Markets: Copper price down on omicron uncertainty
(With files from Reuters and Bloomberg)
