Whether prices rebound or not will hinge on China’s property sector, but that’s not the only variable at play.

There are other sources of iron ore demand, such as China’s renewable energy sector and automotive industry, the largest in the world. Both are considered strategic priorities and receive support from the Chinese government.

And don’t forget supply, which could help rebalance the market if some high cost producers reduce output in light of low prices.

Which way the supply-demand balance tilts will become visible in storage levels, depending on whether stockpiles increase (oversupply) or decrease (undersupply).

A few years ago, talk of dwindling iron ore stockpiles at China’s ports coincided with the sharp run-up in iron ore prices.

Two major ports that receive iron ore shipments are located in Qingdao and Caofeidian where stockpiles have declined slightly since mid-March, according to Ursa Space data.

Stockpile data over the next few months will solidify whether demand from the world’s largest iron ore consumer and importer is enough to absorb supply.

That data can be found in Ursa Space’s new weekly product that offers volumetric measurements of iron ore stockpiles at key global locations. In addition to China, coverage includes exporters Australia, Brazil and South Africa.

As a major producer of metals & minerals, Australia’s economy is particularly exposed to China’s fortunes. Some of the biggest names in mining are based in Australia, such as BHP Group and Fortescue.

The swoon in iron ore prices has hurt their share performance. The graph below shows the S&P/ASX 300 Metals & Mining, an index tracking the metals and mining sector within the Australian stock market.

Spring is typically the time of year when activity at smelters picks up resulting in more iron ore buying, unless stockpiles have grown large enough that steel mills can instead draw down inventories.

What happens over the next few months will impact not only iron ore prices and mining stocks, but also offer a window into the health of China’s industrial economy.

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