.gif?width=220&height=200&mediaprotectionhash=b13da841472e6e7ed500ee35df2a350aaf53d75246118b33ea2095cc7e9a3fc4&ext=.gif)
Goldman Boosts Iron Ore View as 'Oversupply' Two Years Away
01/16/2013 - Iron ore will see another year of “exceptional prices” before supplies start to outpace demand, Goldman Sachs Group Inc. said as it increased its forecast for the seaborne commodity used in steel, Bloomberg reports.
Iron ore will see another year of “exceptional prices” before supplies start to outpace demand, Goldman Sachs Group Inc. said as it increased its forecast for the seaborne commodity used in steel, Bloomberg reports.
Prices will probably average US$144 a dry ton in 2013, up from $140 estimated previously, the bank said in an e-mailed report. The ore may decline to $126 in 2014 before averaging $90 in 2015 and $80 in 2016, it said.
Iron ore surged 76 percent since dropping to a three-year low in September on optimism China, the biggest buyer, is recovering. JPMorgan Chase & Co. today increased its 2013 estimate to an average $130 from $110, while Deutsche Bank AG said Jan. 8 prices may climb to $170 in the first half before falling below $120. Rio Tinto Group, the second-biggest exporter, posted yesterday better-than-expected output for the fourth quarter and said it will press ahead with expansion.
The “market is headed for a long period of significant oversupply, but in our view this is still two years away,” said Goldman. “We expect iron ore producers will see one last year of exceptional prices and profit margins” as the “restocking phase continues, supply starts to tighten and market sentiment becomes more bullish,” the report said…
