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Singapore — Iron ore forecasts at Morgan Stanley have been chopped back for the remainder of the year, with the bank flagging prospects for rising low-cost production and the likelihood that the worldwide surplus will increase every year through to 2021. The commodity will average $50 a ton in the third quarter, 23% down from an earlier estimate, and $55 in the final three months, a 15% reduction, according to a report. The 2017 forecast was pared 15% to $63, while the outlooks for next year and 2019 were left at $58 and $54. After the commodity’s second-quarter retreat, "all market signals suggest trade stability at this level", analysts including Tom Price said in the note, which was received on Tuesday. The bank, which listed iron ore among metals on which it is neutral, said Vale’s ramp up of new mine S11D in Brazil is behind a surplus, capping spot prices, despite robust or stable demand. Iron ore prices that peaked near $95 in mid-February have sunk since then amid rising supp...

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