A surge in steel consumption as the world emerges from its pandemic-induced slump is set to drive iron ore to an unprecedented high as the biggest miners struggle to keep up with the frenzied pace of demand.
Expectations are building that benchmark prices can get to $200 a ton — topping the record $194 hit more than a decade ago — as Chinese steelmakers ramp up production in defiance of government attempts to rein in output to control the industry’s carbon emissions. That’s tightening an iron ore market that hadn’t fully recovered from a supply shock more than two years ago.
“Iron ore prices could go higher in the short-term and exceeding $200 a ton is definitely possible,” said Kim Christie, a senior analyst at consultancy Wood Mackenzie Ltd. It would only take extra supply concerns, or additional strength in Chinese steel production, for prices to get there, she said.
