Goldman Sachs: Resilience

Goldman Sachs write “the feedback from China's ferrous sector generally reinforced our view that the iron ore market should remain relatively tight and prices well-supported into year-end.”

• “Steel mills have indicated they are unlikely to cut any steel production ahead of Chinese New Year. Steel export order books look well-supported into Q124.”
• “It was noted that pig iron production remains lower cost than using scrap, which would continue to support elevated iron ore usage. Mills indicated they would modestly restock iron ore from late December.”
• “On the iron ore price, the main downside risk was seen as coming from policy intervention on exchange positioning, though onshore investors appear to view sell-offs as a buying opportunity.”