(Bloomberg) -- Iron ore will average more than $100 a ton this year as the worldwide market remains tight, despite China’s property crisis hurting the outlook for steel demand there, according to HSBC Holdings Plc.

The global seaborne market for the steelmaking staple will remain in deficit in 2024-25, with gains in steel production outside China, especially in India, aiding consumption, analysts including Howard Lau said in a note.

Iron ore has had a bumpy ride this year, slumping by almost a third in the first quarter on concerns over weakening Chinese demand, , including a dip below $100, before staging a partial rebound this month. Authorities in the biggest importer have been struggling to revive the nation’s property market, a vital driver of steel demand. Reflecting the challenges, the leading steel industry group has been calling on members to reduce output.

“We expect steel demand growth to be muted in the next five years, growing at about 2% as mainland China cuts back,” Lau said. “However, we see India stepping up and recording the world’s fastest steel consumption growth rate.”

Iron ore futures in Singapore — which fell 0.8% to $117.10 a ton as of 2:53 p.m. in Singapore — have averaged about $119 a ton so far this year, a little above the level seen in 2023.

“We don’t expect a meaningful increase in iron ore output by major producers,” Lau said. At the same time, “we expect iron ore demand to remain robust, reflecting our global-steel output estimates,” he said.

(Updates futures price in fifth paragraph)

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