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To determining the global price of steel, it is based on two factors, namely the fundamental factor regarding the world’s demand for steel products and the speculation factor from traders. The pandemic condition yesterday caused iron ore prices to move freely. All because the economy has not yet recovered and the demand that has occurred in the market.
At the end of 2020, there was an increase in the price of iron ore. 2020 is the highest in the last 9 years. In addition, there was an economic recovery in China that caused a high demand for iron ore. The trend is expected to decline if the market realizes the current price speculation.
Covid-19 Effect Iron Ore Price
On the other hand, covid19’s pandemic has also caused an increase in the price of iron ore. The increase is due to delays in production. The delay also affects the transportation process for export production.
The increase in the price of using iron ore can cause factory profits to dwindle. It requires new pricing mechanisms and increased market surveillance in the future. According to Mysteel, the price of iron ore is predicted to be in the range of $110 to $120 per metric ton in 2021, higher than this year’s projection of US $ 109 to $110 per metric ton.
The reality, the prices have increased due to the steady demand from China. China is a country that controls two-thirds of trade and needs it to produce steel. Indonesia does not want to become dependent on imported products. We must try to lift the national steel product to the forefront.
Increasing national steel products requires effort such as to safeguard and anti-dumping policies. The application of SNI is mandatory for all business executants. Efforts made by the government to ensure national products become the market rulers. All industry players need to be more innovative. It is important to develop production capacities so that national products can compete and do not rely on imports.