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MNI: Iron Ore Momentum To Stall Without Construction Rebound

MNI (Singapore)
(MNI) Beijing

Iron ore prices will likely trade flat in the short term unless the property sector rebounds and steel demand exceeds expectations in the off-season.

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Iron ore prices have likely peaked and will require a substantial rebound in steel demand – such as from a turnaround in the construction sector – to rise further, while more government intervention via “window guidance” could also weigh on the market, policy advisors and market analysts told MNI.

Iron ore climbed to an eight-month high in November, with the SGX Iron Ore Future Index rising 10.8% over the month, amid expectations of stronger Chinese demand following the State Council's October announcement of an additional CNY1 trillion in treasury bonds and speculation over housing market support.

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Iron ore prices have likely peaked and will require a substantial rebound in steel demand – such as from a turnaround in the construction sector – to rise further, while more government intervention via “window guidance” could also weigh on the market, policy advisors and market analysts told MNI.

Iron ore climbed to an eight-month high in November, with the SGX Iron Ore Future Index rising 10.8% over the month, amid expectations of stronger Chinese demand following the State Council's October announcement of an additional CNY1 trillion in treasury bonds and speculation over housing market support.

Keep reading...Show less