Asian iron ore market participants largely reckoned a robust first- quarter gross domestic product growth for China to lend support to demand, with fundamentals on the ground remaining firm and discussions around mill margins in focus.
China’s Q1 GDP increased the fastest in a year by 4.5% year on year, beating analysts’ expectations. The 4.5% growth marks the highest since Q1 2022, when the economy grew at 4.8%, according to China’s National Bureau of Statistics.
Market views were mixed for iron ore, with most citing steel mill margins being the most pertinent factor for seaborne prices.
“The [China GDP] news will boost sentiment, but again, it’s fundamental demand that would sustain the iron ore prices,” said an India-based iron ore trader.
“The good GDP number in Q1 built up market confidence on iron ore,” said an iron ore trader in China.
The Platts 62% Fe Iron Ore Index was at $120.45/dry mt CFR North China on April 18, hovering around the $120/dmt mark compared to the beginning of the year, despite volatility seen through Q1, S&P Global Commodity Insights data showed.
Import margins in recent weeks too reflected a more economical option for mills to procure seaborne cargoes, relative to those at ports.
Higher steel production expected in the second quarter also fueled the bullishness, coupled with low iron ore stocks and a recovery in the Chinese property market, according to a Singapore-based iron ore trader.
