Himfr.com's market analyst believes that steel prices have hit bottom, Despite steel prices in November recorded a fall, with prices for coke remaining stable and prices for iron ore going up, further decline in steel prices is highly unlikely.
Downstream industry demand remains weak in the short run, in particular in the North where winter is not suitable for outdoor construction, which reduces the consumption of steel and keeps steel prices low. On the other hand, China's commitment in the national railway infrastructure construction will increase steel consumption in the market in the long run.
Also, Chinese iron and steel enterprises are facing a bargaining opportunity as upcoming negotiations on iron ore are becoming favorable.
In the past, iron ore negotiations are usually carried out in November, but the negotiations have not started this year. Himfr's analyst sees this as a favourable opportunity for China's iron and steel enterprises. It is clear that due to the slowdown in demand for steel products, China's steel enterprises will need less iron ore, which gives them a upper hand in the upcoming negotiations. As China is rich in iron ore stock and prices for iron ore are already very low, it is likely that iron ore prices will go down further.
With three iron ore giants controlling the world's more than 80% market share, a sharp decline in prices is unlikely. Himfr.com predicts that prices for iron ore will most likely drop by 30-40% and even 50%.
