Iron ore prices recover from deep decline

The iron ore market went through complex and dynamic changes at the end of September 2024, reacting to economic news and actions taken by the Chinese government. As of September 27, January iron ore futures, which are the most traded on the Dalian Commodity Exchange, recovered 9% compared to September 20 – to RMB 750/t ($106.94/t). On the Singapore Exchange, quotations of basic October futures increased by 10.9% – to $103.1/t. Thus, prices have recovered to the levels of early September.

Iron ore prices were on a downward trend for most of September, and by September 23, they reached their lowest level in recent years due to a number of factors, including China’s weak economic recovery, which caused uncertainty in the steel market and reduced iron ore consumption by steelmakers.

The tipping point came on September 24, when the Chinese government announced new incentives to support the economy. In response, iron ore prices jumped by more than 7% in one day, the largest one-day increase in the past year. The surge was driven by hopes that the new support measures would boost infrastructure projects and increase demand for steel, and thus iron ore.

Currently, the Chinese government continues to introduce financial and tax incentives that support both the domestic market and foreign investment. These measures are aimed at accelerating economic growth, which has slowed down due to a weak real estate market and general industrial problems.

Analysts emphasize that the situation on the iron ore market in 2024 is unstable due to geopolitical challenges and economic uncertainty. At the same time, China’s identified measures create opportunities for further growth. Investors are closely monitoring market trends and predict that China will continue to introduce new measures to support the economy in the coming months.

The end of September 2024 was a turning point for the iron ore market, which managed to recover from a long decline thanks to Chinese incentives. These support measures are expected to help stabilize the market in the coming months, but global uncertainty remains high. Traders and analysts predict further fluctuations, which largely depend on China’s economic policy and global developments.

ANZ Research expects iron ore prices to be in the range of $90-100/t by the end of 2024 amid weak Chinese fundamentals. According to the worst-case scenario, quotes will fall to $60-80/t.

British international commercial bank HSBC Holdings expects iron ore prices to reach $100/t in 2024. Capital Economics predicts that quotations for this raw material will vary at $99-100/t. By the end of next year, iron ore prices will fall to $85/t.