Both Rio Tinto (ASX:RIO) and BHP Group Limited (ASX:BHP) stated in individual reporting that the Australia’s topmost export destination, China has shown strong indications of recovery in the steel sector. The outlook for China remains strong provided China manages to avoid the second wave of coronavirus in the country.
The global perspective remains dismal as many of the major steelmakers from Europe, India and Japan have either shut down their operations or are operating at lower utilization rates and would depend on the timing of recovery for the economies.
The port outflows have shown growth leading to lower port stocks which would further help sustain strength in the iron ore prices. The Australian iron ore players see this as an opportunity since the Brazilian major Vale has registered significant cut in the production during Q1,2020 due to operational issues and safety concerns.
