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Iron ore is one of the most important commodities in the world, as it is used to produce steel, which is essential for various industries and infrastructure. The price of iron ore fluctuates depending on the supply and demand factors, as well as the geopolitical and economic conditions of the major producing and consuming countries.

In this blog post, we will look at the current and projected iron ore price in the global market in 2023, based on some of the latest data and analysis from various sources.

According to Statista, a leading provider of market and consumer data, iron ore was valued at approximately 117.39 U.S. dollars per dry metric ton unit (dmtu) in April 2023, as compared to 151.25 U.S. dollars per dmtu in the same month of the previous year. This represents a decrease of about 22% year-on-year, reflecting the slowdown in China’s steel production and demand, as well as the increase in iron ore supply from Australia and Brazil.

China is the world’s largest producer and consumer of steel, accounting for more than half of the global iron ore demand. However, China’s steel output has been declining since 2020, due to the government’s efforts to reduce carbon emissions and overcapacity in the sector. Moreover, China’s economic growth has been moderating, as it shifts from an investment-led model to a consumption-driven one, reducing the need for steel-intensive infrastructure and construction projects.

On the supply side, Australia and Brazil are the two largest exporters of iron ore, together supplying about 80% of the global market. Both countries have been ramping up their production and shipments of iron ore in recent years, taking advantage of the high prices and strong demand from China. However, their output growth has also been affected by some challenges, such as environmental regulations, labor disputes, weather disruptions, and operational issues.

According to S&P Global Market Intelligence, a leading provider of financial and industry data, analysis, and news, iron ore prices are expected to ease further in 2023, as China’s steel demand weakens and supply increases. S&P Global Market Intelligence has moderately upgraded its average iron ore price forecast to 123.11 U.S. dollars per dmtu for the March quarter and 117.53 U.S. dollars per dmtu for 2023, based on the broader benefits of China’s reopening after the COVID-19 pandemic.

However, S&P Global Market Intelligence also warns that there are some downside risks to its forecast, such as a possible resurgence of COVID-19 cases in China or other key markets, a further escalation of trade tensions between China and Australia or other major suppliers, or a significant disruption to iron ore production or transportation due to natural disasters or accidents.

In conclusion, iron ore price in the global market in 2023 is likely to remain lower than its peak levels in 2020-2021, due to the softening demand from China and the increasing supply from Australia and Brazil. However, iron ore price may also experience some volatility and uncertainty, depending on how the pandemic situation evolves and how the geopolitical and economic factors affect the global iron ore market.

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