China’s metal demand is still pretty strong

China's iron ore futures rose on Friday and were on course to extend their winning streak to a ninth straight week, backed by firm steel consumption in the world's top user.

China's infrastructure push, spurred by its public-private partnership (PPP) projects to lure private investment in infrastructure and public utility projects, has boosted steel demand this year, fattening margins at construction steel producers to the biggest in years.

Along with firm demand, China’s campaign to slash excess steel capacity as it fights pollution and shuts low-quality production has helped tighten supply and boosted prices.
Rebar futures have risen more than 50 percent this year, but the China Iron and Steel Association this week warned price gains won’t be sustained because there won’t be any big shortage in supply.
Steel’s surge has lifted prices of raw material iron ore, with the spot benchmark moving towards $80 a tonne.

BMI Research said it has increased its average iron ore price forecast for this year to $70 from $65 previously as China’s imports of the commodity remain strong due to steady steel production.

Long-term infrastructure projects in China initiated from the second half of 2016 through the first quarter of this year “will ensure prices of iron ore remain elevated in the third quarter” before demand cools in October-December, it said.
“The improving price environment in comparison with 2016 has increased profitability among iron ore producing companies in recent quarters, but they will be cautious in terms of new project investments as the new downturn begins to be felt in 2018,” BMI said in a note.