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The most resilient metal has been iron ore. Part of the reason has been persistent supply side issues. However, the composition of demand has also played a part, according to strategists at ANZ Bank.

Key quotes

“Based on real estate’s contribution to steel demand, we estimate annualised demand is likely to be down approximately 120mt. But, assuming the real estate market returns to normal during Q2, we see a hit to demand of around 70mt in H1 2020.”

“We are now assuming that seaborne iron ore demand will fall by only 2.5% in 2020. This is against our previous forecast of an increase of 1.6%.”

“We are now expecting the iron ore market to push into a small surplus in 2020. This compares favourably with other commodity markets, which should see iron ore prices hold up relatively well. In fact, we see current levels of around US80/t as fair value.”