Iron ore prices have plummeted by 26% this year, with Julius Baer’s research team expressing a lack of optimism for the metal’s future. Despite a potential short-term price recovery, the firm remains cautious, citing iron ore as their least preferred metal.
Analysts warn against viewing any temporary upturn as a sign of long-term stability, particularly in light of weak economic data from China, especially in metal-intensive sectors like infrastructure and real estate.
While industrial metal markets are hopeful for Chinese improvements, Julius Baer does not share the sentiment, arguing that stimulus measures from the Chinese government are inadequate.
The real estate market in China is showing signs of oversupply and declining demand, with steel producers facing squeezed margins and reduced production. However, high steel exports continue to provide a lifeline amidst sluggish domestic demand.
Amidst these challenges, iron ore prices have fallen below $100 per ton in global markets, reflecting the overall volatility and uncertainty in the industry.
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