(Bloomberg) -- Iron ore is likely to revisit $100 a ton by the end of the year before falling further to $85 in 2025 as China’s housing market collapse worsens, according to Capital Economics Ltd.

Falling steel production and emissions controls on highly polluting blast furnaces should shrink Chinese iron ore demand by 1% in 2024 and 2% in subsequent years, the London-based research firm said in a note on Tuesday. At the same time, plans by the big miners to raise production will swell supply, putting prices under pressure.

Demand growth elsewhere in the world is unlikely to soak up enough of the surplus given China’s near-70% share of the global market, Capital Economics said.

Iron ore has staged a mini-recovery this month, after tumbling below $100 a ton due to disappointing demand in China. Futures last traded at $111.10 a ton in Singapore, up 1.1% on the day although that’s still more than 20% lower than the start of the year. On Wednesday, Rio Tinto Group disclosed a 5% drop in first-quarter shipments, citing an uneven economic recovery in China and weakness in its property sector. 

“This year’s falls in iron ore prices are likely to have been a dress rehearsal for what’s ahead,” Capital Economics said. “Our China team’s forecast for the property sector to halve by the end of the decade does not bode well for iron ore producers’ plans to ramp up production.” 

On the Wire

The US is committed to safeguarding its investments in domestic clean energy manufacturing, even as China builds excess production capacity, White House climate adviser John Podesta said Tuesday.

Chinese leader Xi Jinping told the German chancellor that a surge in clean-technology exports from the Asian nation has helped the world tackle inflation, pushing back against European and US pressure to rein in the country’s powerhouse industries.

China’s beef imports are dwindling amid slowing consumption and ample domestic supply, dealing a blow to its biggest supplier Brazil.

Chinese smelters plan to boost overseas copper shipments after price moves in London and Shanghai in the wake of new Russian sanctions made sales more profitable.

The Week’s Diary

Wednesday, April 17:

  • CCTD’s weekly online briefing on Chinese coal, 15:00

Thursday, Thursday April 18:

  • China’s 2nd batch of March trade data, including agricultural imports; LNG & pipeline gas imports; oil products trade breakdown; alumina, copper and rare-earth product exports; bauxite, steel & aluminum product imports
  • China March output data for base metals and oil products
  • Oil conference in Chongqing hosted by OilChem and CPCA
  • EARNINGS: Eve Energy

Friday, April 19:

  • China weekly iron ore port stockpiles
  • Shanghai exchange weekly commodities inventory, ~15:30
  • EARNINGS: Huayou Cobalt, Gotion

Saturday, April 20

  • China’s 3rd batch of March trade data, including country breakdowns for energy and commodities

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