Iron ore depends on imports, and the world's iron ore resources are concentrated in Australia, Brazil, Russia, Ukraine, Kazakhstan, India, the United States, Canada, South Africa and other countries. In the global iron ore market, there are only two major exporters, namely Brazil and Australia; South Africa, India and Canada belong to the second echelon. However, the severe epidemic situation in Brazil, South Africa and other places may affect the import of iron ore.
At present, the global epidemic is generally showing an accelerating rebound. On December 7, there were 680,000 new diagnoses worldwide. Among them, the epidemic situation in Europe was severe, with 450,000 new confirmed cases, and the African epidemic accelerated and deteriorated, with about 200,000 new confirmed cases. The overall epidemic situation in the United States smooth. The spread of Omicron accelerated, Uganda reported its first related infection, and as of December 7, at least 56 countries around the world had reported cases of Omicron infection. As of December 7, about 55 countries and regions around the world have adopted travel restrictions, mainly targeting inbound travelers from African countries. The Government of Canada has introduced temporary exemptions for travellers stranded in South Africa who meet certain criteria. South Africa has seen a sharp increase in cases since 116 cases were detected in South Africa on November 8, with 11,535 new cases reported in South Africa by December 2.
On December 6, the central bank lowered the deposit reserve ratio. At the same time, the work meeting of the Political Bureau of the Central Committee proposed: to promote the healthy development and virtuous circle of the real estate industry. The current plight of the real estate industry should be greatly improved, and steel consumption is expected to rebound to a certain extent. Due to the expectation of the resumption of production of steel mills, along with the replenishment of steel mills in winter, the daily production of pig iron and the daily consumption of ore are expected to increase in the future, and the short-term fundamentals of iron ore will be improved.
The development of the epidemic may affect iron ore imports. At the same time, driven by the improvement in macro expectations, steel mills are expected to resume production further. Supported by the expectation of resumption of production and replenishment, iron ore prices will remain strong in the short term. Iron ore is expected to rally.
Disclaimer: The content of this article does not constitute a prediction of possible future market price performance. Investors should manage relevant risks reasonably according to their own circumstances.