Australia's major iron ore miners closed higher on Tuesday as the industry awaits outcomes from China's National Congress of the Communist Party to be held today (Wednesday).
The BHP Billiton Limited (ASX: BHP) share price climbed 1.34% to close on Tuesday at $27.31, while the Rio Tinto Limited (ASX: RIO) share price gained 1.29% to close at $71.46. And the Fortescue Metals Group Limited (ASX: FMG) share price closed at $4.96, up 0.41%.
The gains followed varied media interpretations of the World Steel Association's October 2017 Short Range Outlook. While some were reporting that the Steel Association was forecasting global demand to grow, others were reporting that demand was set to slow. But, in some ways, both interpretations were correct.
The World Steel Association report forecasts global steel demand will reach 1,622.1 Mt in 2017 and in 2018 it is forecast that global steel demand will reach 1,648.1 Mt.
"In 2018, we expect global growth to moderate, mainly due to slower growth in China, while in the rest of the world, steel demand will continue to maintain its current momentum," the Association stated.
"So, world steel demand is recovering well, driven largely by cyclical factors rather than structural.
"The lack of a strong growth engine to replace China and a long term decline in steel intensity due to technological and environmental factors will continue to weigh on steel demand in the future."
Perceptions concerning the future of steel demand will be influenced again this week following the outcome of China's National Congress of the Communist Party, when top officials of the world's biggest consumer of metals meet to map the country's future.
As China's measures to reduce pollution appear to be increasing, with greater restrictions on steel production comprising one such measure, iron ore demand there is expected to soften.
But China's so-called Belt and Road plan, a revival of the Silk Road, is expected to increase demand for iron ore and steel along the old trade route.
China's intentions and the future for iron ore should be clearer following outcomes of the National Congress.
