The economic dynamics affect the steel industry’s demand, supply, and rapid price changes. World output is decreasing caused to low demand for steel scrap and a decline in prices. Price forecast by well-known credit rating agencies helps to make investment and trade decisions. Fitch Ratings, the international credit rating agency, has updated its revised forecast for coking coal and iron ore prices.
Forecasts of Iron Ore Prices:
Fitch Ratings has revised its short-term forecast for iron ore prices from $120/MT to $115/MT in 2022 due to a fall in demand for steel products leading to lower production, piling up the inventories of iron ore, which resulted in decreasing profit margins. China, the leading country in the steel market, has lower demand which will cause to affect the
prices of iron ore.
Medium-term expected prices of iron ore will be $85/MT in 2023, and the long-term forecast is $75/MT for 2024.
Forecasts of Coking Coal Prices:
Increasing the supply of coking coal will result in to decrease in the prices. The flow in its supply will be due to the resumption of productivity in Australia and increasing supply to Asia from Russia, which will increase the easy availability of coking coal to the steel industry. Fitch Ratings Forecast a fall in coking coal prices from $400/MT to $375/MT in 2022 for the short term. In comparison, medium-term forecasts are $200/MT for 2023 and $140/MT for a long time.
Fitch forecasts that world output growth of iron ore will be 2.7% from 2022-2026, an outstanding share of increasing production in Brazil and Australia with a slow pace and stable growth in China.
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