Iron Ore: Steel prices continue to show weakness – OCBC

Steel prices continue to decline, and with it, has dragged spot prices in China down, Howie Lee, an economist at OCBC Bank, reports. Key quotes “Domestic hot rolled steel sheet spot prices have fallen about 14% since the Hubei lockdown.”  “We estimate that a return to steel-production parity means futures prices may have to trade in around $70-$75/mt, which means at current levels of almost $80/mt, iron ore remains relatively expensive.” “We note that inventory levels of iron ore in China are falling and as such, prices may stick closer to the upper end of the parity range.”