20 February 2018
- We see short-term supply conditions as bullish. Mill re-stocking remained firm which coupled with lower imports and forward supplies, are positive price developments. However, the expected increase in spot supplies in the short-term are expected to put downward pressure on prices.
- We see short-term demand conditions as bullish. Margins improved which is expected to lift near-term demand for IO. Steel rates remain weak which we expect to pickup as activities resume post holidays. Our domestic vs. imported ore arb suggest greater incentive for seaborne ore while cash and carry arb suggests price supportive developments as well.
- Short-term macroeconomic conditions are bearish. Downstream steel demand is mixed with the weak manufacturing demand negated by firm construction activities Currency conditions continue to provide a drag on prices which along with tighter short-term credit conditions look to put further downward pressure on prices.