Equity Analysis /
Australia

AU : Mining - Iron ore - Fundamentals absorbing iron ore headwinds

    Adrian Prendergast
    Adrian Prendergast

    Senior Analyst - Mining and Energy

    CGS-CIMB
    26 March 2022
    Published by

    Potential for short-term weakness in iron ore prices from a combination of diminished steel mill margins, COVID interruptions, and healthier iron ore supply. Chinese steel prices and inventories remain under pressure. Although growth is likely to steady, with supply still at risk, we see iron ore as likely to remain at levels conducive of ongoing bumper earnings for the sector. We upgrade our iron ore price forecasts, factoring in an expected steepening cost curve and higher sustaining steel demand.