F E AT U R E D
Despite an early-year push, iron ore’s future remains uncertain.
Commodities in 2022: Exploring six key themes While 2021 was a year of surprises in the commodities world, with crushing lows offset by unprecedented highs, what can we expect in 2022? We take a deep dive.
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here’s been a few notable trends to emerge in the commodities world to commence 2022. Nickel prices rose to 10-year highs in January, while lithium jumped amid a supply squeeze. We’ve also seen iron ore make a recovery from the lows of November 2021, a slump which forced several Australian iron ore mines to halt operations. Copper has also started strongly in 2022, trading above $US9500 ($13,218) per tonne in January and the market is expected to remain competitive as the path to electrification continues. But what are the experts’ predictions for
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2022? We chatted to PricewaterhouseCoopers (PwC) and Fitch Solutions to get their commodity forecasts for the year ahead. W H AT T O M A K E O F I R O N O R E ? Seaborne iron ore prices reached three-month highs in January, as 62 per cent Australian iron ore fines rose to $US131.5 per dry metric tonne (dmt) at the port of Qingdao. This had dipped to $US123.9 per dmt at the time of writing, encapsulating the iron ore market’s current tumultuousness. Fitch Solutions senior commodities analyst Sabrin Chowdhury says given the many considerations at play, it’s difficult to put a finger on iron ore.
“Iron ore is indeed quite uncertain. Last year, prices rallied beyond $US200 per tonne. If you went back a few years when prices were below $US80 per tonne, thinking that iron ore would go above $US200 was really unthinkable at that point,” Chowdhury says. “This year and also going forward, we do not see a return of the mismatch between supply and demand which would lead to prices rallying beyond $US200 a tonne – definitely not this year or the coming years, ceteris paribus.” The rise of iron ore could be put down to China announcing or beginning 3 trillion yuan’s ($654.85 billion) worth of infrastructure projects to start 2022,
