Outlook for iron ore revised down by USB on market share battle
October 16, 2014 6:54 am
UBS AG has cut its outlook for prices of iron ore for the next two years behind an increasing surplus that has had suppliers jockeying for market share.
According to a report released today by analysts including Daniel Morgan, the raw material used for the creation of steel will have an average price per metric ton of $85 in 2015 and $82 in 2016, lower than the original forecast of around $103 for both years. UBS, however, said that iron will still be able to rally to the $100 price level by the end of the year when the restocking of mills occur.
Iron ore has declined by 39% this year behind the increase in low cost production of companies such as BHP Billiton Ltd., Rio Tinto Group, and Vale SA which caused a global glut in supply. UBS said that, “The iron ore game has changed from a growth opportunity into a battle for market share. Seaborne producers will try to displace high-cost domestic supply in China, but a core will likely remain competitive. The majors also continue their aggressive expansion plans.”
Iron ore with 62% content for delivery in China’s Qingdao port fell by 1.5% yesterday to a price per ton of $82.55, based on data from the Metal Bulletin Ltd. It reached its lowest since September 2009 on September 29th when it $77.97.
Morgan Stanley described the metal as the least preferred metal next to gold last October 8th due to an excess in supply. It claims that it will average $100 per ton this year before falling to $87 next year.
The material has been provided by InstaForex Company – www.instaforex.com
UBS AG has cut its outlook for prices of iron ore for the next two years behind an increasing surplus that has had suppliers jockeying for market share.
According to a report released today by analysts including Daniel Morgan, the raw material used for the creation of steel will have an average price per metric ton of $85 in 2015 and $82 in 2016, lower than the original forecast of around $103 for both years. UBS, however, said that iron will still be able to rally to the $100 price level by the end of the year when the restocking of mills occur.
Iron ore has declined by 39% this year behind the increase in low cost production of companies such as BHP Billiton Ltd., Rio Tinto Group, and Vale SA which caused a global glut in supply. UBS said that, “The iron ore game has changed from a growth opportunity into a battle for market share. Seaborne producers will try to displace high-cost domestic supply in China, but a core will likely remain competitive. The majors also continue their aggressive expansion plans.”
Iron ore with 62% content for delivery in China’s Qingdao port fell by 1.5% yesterday to a price per ton of $82.55, based on data from the Metal Bulletin Ltd. It reached its lowest since September 2009 on September 29th when it $77.97.
Morgan Stanley described the metal as the least preferred metal next to gold last October 8th due to an excess in supply. It claims that it will average $100 per ton this year before falling to $87 next year.
The material has been provided by InstaForex Company – www.instaforex.com
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