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Iron Ore Rally Seen Unraveling as Demand `Doesn't Look Great'

  • Rally not sustainable over longer term, Sucden's Kamal says
  • Port inventories in China expand to highest level since May
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A rally in iron ore that’s lifted prices to the highest level since November is poised to unravel as China’s steel demand weakens and miners press on with efforts to cut costs, according to Sucden Financial Ltd.

“We do not view this rally as sustainable over the longer term,” analyst Kash Kamal said in an e-mailed response to questions. “Demand for steel has dropped sharply and with the domestic industry battling with overcapacity and oversupply, the long-term outlook for iron-ore demand doesn’t look great.”