JPMorgan Slashes Iron Ore Outlook, BHP and Rio Shares Fall

JPMorgan expects iron ore prices to extend its drop and average $67 a metric ton next year and $65 in 2016.

According to Bloomberg:

The steel-making raw material will average $67 a metric ton next year, 24 percent less than previously forecast, and $65 in 2016, down 23 percent, the bank said in an e-mailed report received today. So far this year, it’s averaged $98.82 a ton, according to data from Metal Bulletin Ltd. In 2017, prices will average $69 a ton, 16 percent less, the bank said.

Iron ore is heading for the biggest annual loss in at least five years as Rio Tinto (RIO) Group, BHP Billiton Ltd. (BHP) and Vale SA (VALE5) expanded output, spurring a glut just as growth slowed inChina. The larger miners are choosing to overproduce, driving prices lower and forcing the closure of higher-cost suppliers, according to Bank of America Merrill Lynch. The raw material may drop to less than $60 next year, Citigroup Inc. estimates.

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