Iron ore supply recover in 2020 will lead to sharp price drop, according to the Australian government's Department of Industry and Science.
The FOB Australia iron ore price (62 percent Fe content) is expected to drop by 21 percent to $63/mt next year from $80.1/mt, forecasted for 2019. In 2021, it will post further slight decrease to $60.5/mt FOB. Such forecast is based on expected increase of supply volumes from major exporters. Australia is predicted to ship by 30 million mt higher than in 2019 – 864 million mt, the department said. Moreover, exports from Brazil will reach 408 million mt, 28 million mt above the volumes, expected this year. “Overall supply is projected to pass 1,600 million tonnes by 2021 [against just over 1,500 million mt],” according to Australian government's Department of Industry and Science quarterly report.
“Australian iron ore prices peaked in mid-2019 following the fallout from the tailings dam collapse in Brazil, but subsequently corrected. In late 2019, iron ore prices have stabilised at around the same level as in late 2018,” a report said.