Prices to continue to be weighed down by high port inventories
Goldman Sachs analysts have revised their forecast for iron ore prices for the fourth quarter of 2024 down by $15 to $85/t. This is due to oversupply on the market and stabilization of demand from the largest consumer, China, Reuters notes.
Last week, iron ore futures on the Far Eastern markets rose as expectations of a recovery in demand from China stimulated positive sentiment in the market. However, the economic recovery in the country is slower than expected.
The bank’s specialists note a possible short-term increase in prices due to replenishment of stocks on the eve of the holiday week. However, in general, a further decline in prices is expected in October due to high stock levels.
The key risk remains a possible drop in exports due to a reduction in steel production in China. This could lead to an additional decrease in demand for steel ore. Domestic demand in the country is likely to remain weak.
Recall that in early September, iron ore prices on the Dalian Commodity Exchange fell to 678.5 yuan/t ($95.6/t), and on the Singapore Exchange – to $90.8/t. Weak macroeconomic data from China and the lack of signs of recovery in demand for steel continue to put pressure on iron ore prices.