Australia Cuts Iron Ore Price Forecast by 10 Percent

Reuters reported that Australia’s Department of Industry and Science cut its iron ore forecast in 2015 by 10 percent, down to $54.40 per tonne due to a weak outlook for China’s steel sector.

As quoted in the market news:

The forecast by the Department of Industry and Science is a sharp decrease from the $60.40 a tonne predicted three months ago and is way off the $94 a tonne touted in January.

“China’s steel production is forecast to contract in 2015 and 2016 as the seaborne supply of iron ore increases,” the department said in its latest quarterly update. Iron ore is a key ingredient of steel.

Since the last forecast on March 17, iron ore has tumbled as low as $46.70 a tonne, standing at $60.40 a tonne this week. Australia & New Zealand Bank commodities analysts predict the price will fall to $53 over the next three months and stay under $60 a tonne in 2016.

Click here to read the full Reuters report.