Iron Ore to Hit $US58 a Tonne

Australian Mining reported that Citi has slashed its iron ore price forecast from $US65 a tonne to just $US58 a tonne for the present year.

As quoted in the market news:

The price prediction came on the same day iron ore posted its sixth day straight of losses, closing at $US68.50.

Citi said the collapse in the price of oil was behind its downgraded forecast.

It said lower oil prices meant production costs would be cut at some mines, meaning the oversupply of iron ore in the global market will last longer than expected.

Citi analyst Ivan Szpakowski stated:

The fall in prices has lowered the critical cost support for iron ore and this is likely to continue falling as producer currencies depreciate further versus the US dollar and local diesel prices continue to fall.

Click here for the full Australian Mining report