Singapore — Iron ore will weaken next year as global supplies increase, including from a new mine in Brazil, at the same time that steel production risks topping out in China, according to the Goldman Sachs Group, which expects prices to decline back towards $50 a tonne. The raw material may fall to $60 a tonne in three months, $55 in six and $50 in 12, according to the bank’s projections, which suggest a second year of lower prices after they dropped in 2017. Benchmark ore with 62% content was last at $67.76 a dry tonne, according to Metal Bulletin. The forecast for lower prices "is mainly because we see steel production in China peaking [but it] should fall going forward and iron ore supply is still growing, with S11D ramping up," analyst Hui Shan said in an e-mail to Bloomberg, referring to Vale’s giant new mine. Iron ore investors have endured a volatile ride this year as prices swung in a wide arc on policy shifts in China, where officials are curbing steel supply to cut pollut...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.