2157 GMT - Citi thinks China could look to shut 4%-5% of its steel mill capacity as the country tries to boost profitability in the industry. This would translate to a reduction in iron-ore demand of some 65 million-80 million tons. If it happens, then iron-ore prices could be set for a near-term rally, Citi says. That's because iron-ore prices have historically tracked improvements in steel mill margins, as investors assume the stronger incentive for mills to produce will lead their owners to rebuild iron-ore stockpiles. "However, without a meaningful improvement in underlying steel or iron ore demand, any potential rally in iron-ore prices is expected to be short-lived and should be viewed as a selling opportunity," Citi says. (david.winning@wsj.com; @dwinningWSJ)
(END) Dow Jones Newswires
January 27, 2025 16:58 ET (21:58 GMT)
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