Australia has announced another decline in its iron ore price forecast for 2015 and 2016, with the iron ore price forecast declining to $53/mt from the previous forecast of $54.4/mt for 2015 and to $51/mt for 2016, according to a report by the Australian Government Department of Industry and Science.
In the June quarter this year, the iron ore spot price fell 43 percent year on year and closed August at $50/mt FOB. The shock to China’s stock markets in early July led the price to fall by 11 percent in one day to $38.80/mt FOB. However, prices quickly recovered through July and remained stable at around $50/mt FOB in August and early September. The report said that the recent price stability is forecast to be temporary as ongoing increases in supply and the onset of winter in the northern hemisphere, which affects construction, is expected to weigh down the price in the December quarter.
In 2015, Australia’s iron ore exports are forecast to increase by around six percent to 762 million mt supported by increased supply capacity. The low prices will continue to encourage Australian iron ore miners to cut costs and improve productivity.