Goldman Sachs raises its iron ore price forecast
The US-based global investment banking firm Goldman Sachs increased its price forecast for iron ore, expecting iron ore prices to rise to $85/mt in the next three months, compared to its previous forecast of $55/mt announced in November last year, according to media sources. Goldman Sachs expects that an increase in Chinese steel demand after winter supply restrictions will be the key driver. At the same time, Goldman Sachs’ three-month forecast for metallurgical coal now stands at $220/mt from its previous forecast of $165/mt.
In addition, the finance company also expects that iron ore will average $68/mt in the current year, $63/mt in 2019 and $60/mt in 2020, while it also expects that the winter production cuts in China’s steel industry will continue in 2018 and 2019 given the government’s determination to clean up the environment.
Meanwhile, earlier this week, international credit ratings agency Fitch Ratings stated that it expects iron ore prices to decline below $60/mt during this year from an average of around $75/mt in 2017, with the expectation of flat demand in China combined with around 50 million mt of new capacity entering the market.
*This was published on SteelOrbis website on February 2, 2018.