Iron ore prices are expected to continue its falling-trend as global supply is expected to increase while the global demand slows, according to moody’s Investors Service. The market will be focusing on the gross domestic product report for China, with analysts expecting to a slight fall from the previous figure of 7.5% in August which could have a negative impact on the demand of iron ore.
“About 300 million metric tonnes of new and expanded supply will come on stream over the next few years. Global steel-production growth in 2014 remains muted with China, the key driver of consumption, continuing to slow,” analysts from Moody’s said in a report on Monday.
“Downward rating actions for iron ore producers could result as Moody’s reassesses the impact of a protracted pricing weakness,” it said. The so-called price sensitivity for iron ore was revised to a range of $75 to $85 a ton through 2016, according to the report.
According to Moody’s Investors Services, ore prices may remain its downturn trend. Ore with 62% content delivered to Qingdao, China, posted its third straight quarterly loss in three months till September before falling to $77.97. Data from Metal Bulletin showed that prices were at $80.82 a ton last week.
Last week, mining giants and iron ore suppliers including Rio Tinto, BHP Billiton and Vale SA raised output and forecast in Australia and Brazil, boosting their joint share to 79% next year and 73% last year.
Free Reports:
Get Our Free Metatrader 4 Indicators - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter
Get our Weekly Commitment of Traders Reports - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.
Global surplus is expected to increase to 163 million tonnes in 2015 from 52 million this year, according to Goldman Sachs Group, while analysts expect a higher demand for Iron ore from China and India.
China’s stockpiles are contracting, signaling the slow demand and high-cost production.
The post Iron Ore To Extend Downward Trend: Moody’s appeared first on | HY Markets Official blog.
