Iron ore futures rose above $102 per tonne amid hopes for Chinese stimulus. Chinese steel production increased, but the government aims to limit output. Trade tensions intensified as Vietnam imposed higher dumping levies on Chinese steel, with other countries preparing similar measures.
In mid-March, iron ore futures surpassed $102 per tonne, reaching a two-week high fueled by expectations of further stimulus from China, the largest consumer of the metal. This optimism was heightened by announcements from senior government officials in Beijing regarding initiatives to enhance consumption.
During the active construction season, Chinese steelmakers increased production, with hot metal output rising to 2.31 million tons, consequently elevating the demand for iron ore. However, the government has reiterated its strategy of curbing crude steel production due to fears of overcapacity in blast furnaces and mills, with an anticipated reduction in output by 50 million tons each year.
In a context of escalating trade disparities, Vietnam has escalated dumping duties on Chinese steel. Additionally, countries such as South Korea, Brazil, and Chile have expressed intentions to establish similar protective measures against Chinese imports.
In summary, the rise in iron ore prices reflects positive sentiment regarding potential Chinese stimulus measures and increased steel production amidst the construction season. Nonetheless, the regulatory landscape concerning steel production remains stringent. Furthermore, trade tensions are exacerbated by new protective tariffs against Chinese steel from several countries, which may influence market dynamics significantly.
Original Source: www.tradingview.com
