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Bloomberg reported that although iron prices have been falling on weak economic growth from China, a report from Macquarie Group Ltd. (ASX:MQG) suggests the metal could be slated for a price rise.
Bloomberg reported that although iron prices have been falling on weak economic growth from China, a report from Macquarie Group Ltd. (ASX:MQG) suggests the metal could be slated for a price rise. The report points out that even though China may have a large inventory of iron ore in its ports, the ore held in mills is dropping, leading to demand that could squeeze iron prices upwards.
As quoted in the publication:
Macquarie said historical data show there has “often” been an inverse relationship between iron ore prices and the percentage of mill-owned stocks held in China’s ports, with mills holding more stock in port when prices are falling, and vice versa. When prices drop, the mills destock domestic ore “more aggressively” than seaborne ore, according to the bank.