Goldman Sachs cuts Q4 iron ore price forecast by $15/t on supply glut | Kitco News

Goldman Sachs cuts Q4 iron ore price forecast by $15/t on supply glut

By Reuters

Published:

Sep 16, 2024 – 8:09 PM

Updated:

Sep 16, 2024 – 8:11 PM

Reuters

Goldman Sachs on Monday cut its iron ore price forecast for the fourth quarter of 2024 by $15, to $85 per metric ton, citing market oversupply even though demand from top consumer China is stabilizing.

Dalian iron ore futures gained last week as the prospect of Chinese stimulus and a recovery in steel demand lifted market sentiment amid the country’s faltering economic recovery.

“We note potential price support from pre-Golden Week holiday restocking over the next two weeks, but a continuing build in total iron ore stocks is setting the scene for another price drop in October,” analysts at the bank said in a note, referring to China’s annual week-long holiday next month.

Iron ore fuels China’s industrial sector, particularly steel production.

Goldman continued to maintain that the likelihood of falling exports posed a key risk to steel production in China in the coming year.

This could lead to a further drop in Chinese iron ore demand “given that we see increased support from domestic demand as unlikely”.

Despite reduced exports from India, the world’s fourth-largest producer of the steel-making ingredient, an oversupply of iron ore is persisting due to low demand, the bank said, adding that balancing the market would require lower-cost producers to also cut production.

But for this to happen, the price of iron ore needs to drop further, it said.

(By Anushree Mukherjee; Editing by Kirsten Donovan)

Reuters

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

Source: kitco.com

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