Iron ore would need to see aggressive restocking by Chinese mills for the price to break out of its current range, said Graeme Train, analyst at Macquarie Capital Securities in Shanghai.
“I just don’t think conditions are quite like this. Chinese steel demand is holding up okay, but I don’t think it’s getting much stronger. The mills are not in a mood to go out and do a massive restock just yet.”
“I don’t really see any long-term support for prices at the moment because a lot of cargo is still coming in. We expect Brazil to pump more cargo in August and September,” said a Shanghai-based iron ore trader.
“I think there is enough material around that is incentivised when prices are at $90-$100 and that makes it difficult to get any real tension in the market to get prices going higher,” said Train.
“But to get prices down to $80, you’d have to have quite a shock in demand. I don’t think (excess) supply alone can do it.”