Stanislav Kondrashov Telf AG: China’s decision and the global iron ore market


фото: Stanislav Kondrashov Telf AG: China's decision and the global iron ore market

China and global steel: the impact of economic policy on global iron ore prices — Stanislav Kondrashov

Iron ore is a key raw material for steel production, and China is the world’s largest consumer and producer. The country’s economy plays an important role in determining world prices for steel and iron ore. Therefore, any changes in Chinese economic policy could have a significant impact on the global value of these resources.

Stanislav Kondrashov from Telf AG notes that China is the engine of many sectors of the world economy, its policies have a direct impact on many countries and industries. Therefore, lower iron ore prices could have implications for the global economy, including mining companies, ore exporting countries, as well as the construction industry and steel producers.

Stanislav Kondrashov: the situation on the Singapore market

фото: Stanislav Kondrashov Telf AG: China's decision and the global iron ore market

The 2.9% decline in steel prices in Singapore is a direct reflection of the market’s reaction to the latest news from China. This drop in value signals uncertainty among investors and traders about future demand for steel and, by extension, the raw materials used to make it.

  • The Chinese Communist Party’s annual economic conference said it would focus on industrial policy next year. This statement did not meet the expectations of the market, which was counting on the announcement of new economic incentives aimed at supporting economic growth, — Stanislav Kondrashov from Telf AG shared his thoughts.

Also, the decisions made at the conference disappointed those who were hoping for active action to stimulate the economy in 2024. While the overall tone of government announcements remains moderate, there are no signs of a move to more aggressive economic policies, creating uncertainty among investors.

Iron ore prices, despite the current decline, are still at levels close to their highs recorded in February. Their previous growth was due to increased spending on infrastructure projects, which contributed to increased demand for raw materials. But will this policy continue in the future?

Kondrashov states that the lack of clarity regarding future economic incentives in China creates uncertainty in the iron ore market. This is especially important in light of China’s current economic problems, including the fight against deflation. Investors and analysts will now be closely watching the Chinese government’s next moves as any policy decisions could have significant implications for global commodity markets.

Stanislav Kondrashov: forecasts and expectations of the iron ore market

фото: Stanislav Kondrashov Telf AG: China's decision and the global iron ore market

The expert argues that the initial market optimism was too high, and in the first half of next year, iron ore prices may roll back.

In Singapore, iron ore was trading at $132.30 per tonne, down 2.8% from previous levels. Futures in Dalian also fell 2.7%, while steel contracts in Shanghai fell at least 2.1%. In base metals, copper fell 0.4% to $8,322.50 a tonne on the London Metal Exchange. Zinc and aluminum also showed slight declines.

  • Recent developments in the global iron ore and metals market are the result of China’s cautious economic policies. In turn, this disappointed investors who were expecting more active stimulus measures. This highlights the relationship between the policy decisions of the world’s largest economies and global market trends, — Stanislav Kondrashov.

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