Goldman Sachs now looking for iron ore to head to $85 (/metric ton) in the next 3 months
- From their previous forecast (in November) at $55
- Says there is a new floor at around $60
GS cite:
- Iron ore's price run
- Think steel output in China is poised to jump when winter supply curbs are dropped ... which will support ... looking for greater seasonality in prices
- premium for high grades is expected to endure
"The key consequence of mills running at full capacity and making record profits is that high-grade iron ore is preferred to low-grade iron ore, for it creates an environment where maximizing productivity and yields becomes the top priority"
Goldman raised full-year forecasts
- but risk from rising global output of high-grade material and lower steel production in China
- Iron ore will average $68 a ton this year, $63 in 2019 and $60 in 2020
- "We expect the winter cuts to repeat themselves in 2018 and 2019 given the government's determination to clean up the environment"
- "We also expect iron ore prices to increase in the first and third quarters on the policy-driven seasonality"
Summary from via Bloomberg
