Iron-ore prices to trend lower in first six months of 2021
The surge in iron-ore price between the second and fourth quarter of 2020 has run its course, says Fitch Solutions Country Risk and Industry Research.
It notes that prices should grind lower during the first half of this year as supply improves and demand growth slows.
On the supply side, improving production growth from Brazil will help to loosen tight supply in the seaborne market, Fitch Solutions says.
In terms of demand, the strong rebound in China’s demand for iron-ore that began in the second quarter of last year is likely to slow during the first quarter of this year as winter steel production cuts take effect and well-worked inventories encourage buyers to pause purchases at currently high prices, the firm notes.
Fitch Solutions forecasts an average iron-ore price of $120/t for this year and $100/t for 2022.
Looking beyond this year, Fitch Solutions expects iron-ore prices to follow a multi-year downtrend.
It expects prices to decline to about $72/t by 2025.
Fitch Solutions says this price decline will be driven by a combination of weaker demand growth and stronger supply loosening the markets.
Source: Mining Weekly