Despite beginning the year in good shape, the global iron ore industry is starting to experience a fresh drop in prices that has analysts trying to decide whether this is the start of a deeper downtrend or a pull-back.
According to the Metal Bulletin, the price for benchmark 62% fines slipped Tuesday below $73 per tonne, down $1.36 per tonne month-to-date average.
Chinese iron ore futures ticked higher, but kept near one-month lows on Tuesday, as ample supply of the steelmaking raw material countered transport disruptions caused by heavy snow in the country.
Experts at UK-based research and consultancy group Wood Mackenzie say whether the current reverse becomes a rout or not, iron ore’s near future is not looking good. As a result, the consultancy has dropped its price forecast for seaborne to $63 a tonne or 12% below last year’s average of $71 per tonne.
In a note Tuesday, they warn that, as 2017 was full of positive “surprises,” 2018 could bring a few too. So far, they add, risk to the consultancy’s 2018 forecast for Chinese steel and seaborne iron ore is on the upside and they name five trends to keep an eye on this year.
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