Hierro takes its toll on the Chinese economy, is expected to drop to $ 100 – CE

The price of iron had a magnificent 2020, going from about $ 80 per ton to more than $ 150 by the end of the year. Prices rose further in January, topping $ 170 per tonne. Despite the huge price hike since the beginning of 2020, the strategists of Capital Economics they assure that prices will fall this year.

“We hope that the demand growth in China, which accounts for about two-thirds of global consumption, slows down. The new restrictions on share of real estate loans They should curb the growth in demand for steel and also the appetite for iron. Furthermore, we anticipate that the slowdown in credit growth in general and the gradual withdrawal of fiscal stimulus metal-intensive infrastructure will impact the demand for steel in the construction sector. “

“We believe that the offer, in particular that of Brazil (representing around the 15% of world production), will rebound this year. Even if it is considered a conservative year-on-year increase of Vale’s production, in line with the final part of its production forecast of 315-335 million tons for 2021, the supply from Brazil would increase by about one 6% this year.”

“A major slowdown in demand growth from China, coupled with a modest pickup in iron supply from Brazil, should push the price of iron ore down to around 100$ dollars per ton by the end of 2021. “

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