While Mainland China’s domestic demand for steel and iron-ore remains weak, BMI highlights reduced appetite from Beijing for large-scale stimulus with the focus on boosting consumption, as opposed to supporting heavy industries, remaining unchanged, to the detriment of iron-ore.
The official China manufacturing purchasing managers index contracted for the seventh consecutive month to 49 in October, while new home prices remained in decline, the unit points out in its outlook for iron-ore prices report.
However, BMI expects prices to remain fairly supported by Mainland Chinese steel exports driven by easing trade tensions and a still resilient global economy, despite the upside being capped by environmentally induced steel production curbs in Mainland China.