International credit ratings agency Fitch Ratings has announced that it has revised up the price forecast for iron ore for 2023, while maintaining the predictions for coking coal.
Accordingly, iron ore price assumptions for 2023 increased from $100/mt to $105/mt, while price forecasts remain the same respectively at $85/mt, $75/mt and $70/mt for 2024, 2025 and 2026. The agency said the upward revision for 2023 reflects year-to-date price performance due to robust demand from Chinese steel production in early 2023, particularly due to infrastructure spending, while iron ore exports from northern Brazil were low in early 2023, with shipments starting to increase only in June. Demand from Europe is still weak, as expected. Fitch assumes prices will reduce in the second half as the steel production is anticipated to moderate in China in line with the government policy and iron ore supply to rebound.
Meanwhile, coking coal price assumptions for the current year and the next three years respectively stand at $220/mt, $150/mt, $150/mt and $140/mt. According to Fitch, prices have fallen on weak Asian demand with customers delaying purchases in anticipation of further price declines, while supply has improved, with shipments from Australia exceeding 2022 levels since March.
