FXStreet (Mumbai) – Iron ore is a buyers’ market and prices will probably extend declines this half as low-cost supplies expand, according to Goldman Sachs Group Inc as reported by Bloomberg.
Recent weakness seen in Australian shipments is only a temporary lull on the way to further expansion, analyst Christian Lelong said in a note on Tuesday.
“Stock levels may start to grow modestly in the months ahead as supply growth accelerates once again but, in a buyers’ market, this is likely to come at the expense of further price declines,” Lelong noted.
Ore with 62 percent content delivered to Qingdao rose 1.8 percent to $52.35 a dry metric ton on Monday, the highest price in a week, according to data from Metal Bulletin Ltd. Prices retreated to $44.59 on July 8, the lowest level in at least six years, and have lost 27 percent this year.
While Goldman didn’t give a price target in the latest note, the bank said in a July 20 report that it expected prices to drop over the next four quarters from $49 a metric ton through September to $44 by the April-to-June period of 2016.
(Market News Provided by FXstreet)