Iron Ore & Steel Outlook

The global economy performed better than expected so far in 2023, but concerns about a cold winter, rising oil prices, high borrowing costs, and China's economic slowdown are looming large. Central banks are maintaining the narrative of higher-for-longer interest rates due to persistent higher prices, which has weighed on base and precious metals' performance. Despite pledges from Beijing to support the economy, current measures are not expected to have an immediate impact on the real estate sector, which means that there is unlikely to be a large-scale property development that would increase demand for stainless steel prices in the last quarter of the year. Nonetheless, the cumulative impacts of policy support and a dovish monetary policy in China should create a solid foundation for the economy to recover in 2024. Such a transition should push the sentiment from the oversold into neutral. News out of China and the US should bring stronger bounds of volatility in base metals’ performance in Q4 2023.