Why China’s GDP numbers are important for Aussie iron ore miners

Follow us on Google News:
 Why China’s GDP numbers are important for Aussie iron ore miners
Image source: Copyright © 2021 Kalkine Media


  • China will be releasing its Q4 GDP data on Monday at 0200 GMT.
  • Investors will be keenly watching the commodity space, as China’s GDP numbers will be made public.
  • Iron ores price has been rallying since December, now trading over US$125 per tonne, as of 17 January 2022.

China will be going to announce its Q4 GDP numbers on Monday at 0200 GMT. According to a Reuters poll, China’s GDP is expected to grow at the slowest pace in 1-1/2 years, at 3.6% for the quarter ended December 2021, over the same period last year.

Image Source: © Jeffthemongoose | Megapixl.com

For the year 2021, China’s GDP is likely to expand by 8%, which in itself is the highest annual growth in a decade. However, these numbers could seem a bit deceptive because the base set in 2020 was quite low due to extensive economic damage by the COVID-19 pandemic.

Read More: Fall in iron ore prices prompts decline in Australian exports in October

Aussie iron ore miners will be in focus

China is a heavy consumer of iron ore, all thanks to its massive real estate sector, which contributes roughly 30% to its GDP. Investors will be keenly watching the commodity space, as China’s GDP numbers will be made public soon.

Iron is also seen as a barometer for the Chinese economy. The GDP numbers would set the tone for the price movement of iron ore this week. Analysts are predicting a slowdown in the real estate sector, primarily led by a decreased production of steel, which uses iron as a major component. The property market had already shown signs of a cooldown amid a massive debt crisis looming over China’s Evergrande Group. However, the most indebted property developer managed to extend the deadline for its recent debt payment after negotiating with onshore bondholders.

The bigger concern over faltering steel production is China’s strict emission curbs ahead of the Winter Olympics, forcing steel mills to cut down on its production to comply with norms. Some analysts also believe that it is just a temporary halt, and the production is expected to pick up after the Winter Olympics.

The iron ore price has been rallying since December last year, now trading over US$125 per tonne, as of 17 January 2022. The rise in the price has been supported by heavy rain in Brazil, which made Vale, one of the largest iron ore producers in the world to halt its production, thereby reducing the supply.

Profit margins of local miners such as Fortescue Metals Group Limited (ASX:FMG), Rio Tinto Limited (ASX:RIO) and BHP Group Limited (ASX:BHP) would be impacted big by changes in iron ore prices. The Aussie dollar (AUD/USD) will also be in focus as China releases its Q4 GDP data.

Read More: Why is iron ore so important to the Australian economy?


The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.

Featured Articles

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK