iron-and-steel news


Iron ore has become one of the hottest commodities of the year.
Its price has almost doubled over the past year, startling investors and analysts who had anticipated the commodity would suffer another dismal year after three annual declines due to significant oversupply.
China’s stricter rules to combat pollution, ongoing supply-side reforms to curb capacity, and “hot money” may have largely pumped up iron ore price , some experts said. They now expect the price strength could continue into 2017.
Iron ore pulled back Friday night after hitting US$82.4 per tonne on Wednesday – its highest level since September 2014. However, the commodity is still up almost 90 per cent this year, after plunging to a seven-year low in December 2015.
This defied earlier expectations of iron ore price weakness in the fourth quarter by a number of investment banks, including UBS, Morgan Stanley and Citigroup.
As a result, many analysts have recently revised their forecasts.
Goldman Sachs upgraded its forecast on iron ore prices to US$65, US$63, and US$55 per tonne in three months, six months and 12 months, respectively.
JP Morgan analysts also increased their 2017 iron ore price target to US$60 per tonne from the previous US$54.
They said the unexpected rally in iron ore price has been largely driven by hot money from Chinese speculators.
Rising Chinese demand is also a key factor as mainland steel mills increased the use of higher grade iron ore to reduce production cost after the price of steel-making ingredient metallurgical coal (met coal) surged.
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