Citi sees iron ore price back to $100/ton in Q4

|By:, SA News Editor

Iron ore prices have plunged by a third this year, hovering at ~$94/ton this week, thanks to the rapid growth in supply from Australia and other exporting nations, but Citi believes the supply surge is peaking in Q2 and that H2 of this year should see a leveling off in supply.

While UBS is cautious, Citi says iron ore can find price support at $90/ton and that it sees prices back to $100/ton in Q4; if iron ore were trading at $90, China - a high-cost market - would have to cut 25% of its production, and other producers would have to curtail as well, Citi says.

Iron ore miners are lower today: VALE -0.6%, RIO -1.1%, BHP -0.5%, CLF -0.7%.