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23 Jun 2015
Iron ore prices to remain undermined around $49/tonne in Q3 – Goldman Sachs
FXStreet (Mumbai) - Goldman Sachs said in its latest report that iron ore is headed back below $50/tonne as low-cost supplies from Australia and Brazil expand and a slump in steel squeezes mills’ profits, Bloomberg reported on Tuesday. The price dropped to a one-month low.
Freight data from terminals in the two biggest shippers showed volumes rose 10% in the first half of this month compared with the average over the first five months, the bank said in a report.
The rise will be sustained, allowing inventories in China to recover and sending prices lower again, Goldman Sachs said, predicting ore will average $49/tonne in the third quarter and $48/tonne in the final three months.
Goldman Sachs further explained that the forecast increase in supplies will help to shore up the inventories that were depleted by weaker-than-expected exports in April and May and, once they are back to normal, low prices will again be required to balance the market.
Freight data from terminals in the two biggest shippers showed volumes rose 10% in the first half of this month compared with the average over the first five months, the bank said in a report.
The rise will be sustained, allowing inventories in China to recover and sending prices lower again, Goldman Sachs said, predicting ore will average $49/tonne in the third quarter and $48/tonne in the final three months.
Goldman Sachs further explained that the forecast increase in supplies will help to shore up the inventories that were depleted by weaker-than-expected exports in April and May and, once they are back to normal, low prices will again be required to balance the market.