Seeking Alpha

Iron ore price outlook cut by Morgan Stanley, miners lower premarket

  • Morgan Stanley cuts its iron ore price estimate for this year and foresees a further drop in 2015, as a seaborne surplus grows faster than expected and the level of cost support at Chinese producers declines.
  • Prices are expected to average $105/ton this year vs. $118 forecast in May and $135 in 2013, and average ~$90/ton in 2015, 21% below an earlier estimate.
  • Iron ore has dropped below $92 for the first time since 2012 as mining companies boost output, betting that rising exports to China would more than offset lower prices.
  • The firm downgrades Vale to Equal Weight from Overweight with a $15.20 price target.
  • RIO -2.9%, CLF -2.8%, VALE -1.3%, BHP -1.2%, MT -1.2% premarket.
Comments (9)
  • mr wonder
    , contributor
    Comments (546) | Send Message
     
    When Investment Banks like Morgan Stanley and Goldman Sachs are shouting out their down grades to everyone everywhere, they are really saying "sell your shares to us". Because they all understand, economic growth is proceeding and steel companies are heavily undervalued.
    12 Jun, 08:55 AM Reply Like
  • Teodor Rasa
    , contributor
    Comments (206) | Send Message
     
    MS is one of the biggest commodity traders on Wall st... go figure.

     

    It's like Barclays, the biggest FX traders, shouting out.... short yen short yen...
    12 Jun, 11:40 AM Reply Like
  • xtddd
    , contributor
    Comments (309) | Send Message
     
    i agree with you greatly! i am glad to see they release negative news on clf.
    13 Jun, 02:45 AM Reply Like
  • Douglas E. Johnston
    , contributor
    Comments (1706) | Send Message
     
    WOW - give MS an A+.

     

    Given the average for the first 5-months is $115 and the futures market is predicting $90-95 for the balance of the year, I am astonished they've discovered the secret recipe to forecasting
    12 Jun, 09:23 AM Reply Like
  • petergrt
    , contributor
    Comments (357) | Send Message
     
    Regardless of the ainalists' BS, when MS poooops, the market listens - VALE is down almost 4% . . . . !!!
    12 Jun, 01:29 PM Reply Like
  • mr wonder
    , contributor
    Comments (546) | Send Message
     
    Depends who that market is.
    Volume today is low.
    On this volume MS easily could trade the stock down.
    The trick is easy. Two traders at MS are hypertrading (low selling and buying, selling back even lower and buying back) the stock to each other. In the mean time private investors (MS and GS call them retail investors) get scared and take their losses.
    This is pure theft, but everyone seems to accept this organised crime of the big Wall Street investment bankers.
    12 Jun, 03:46 PM Reply Like
  • Brian Sanders
    , contributor
    Comments (757) | Send Message
     
    "In the mean time private investors (MS and GS call them retail investors) get scared and take their losses. This is pure theft"

     

    No. If an individual is scared, and sells based on emotion then that is their fault. A prop trader cannot FORCE someone to sell, that is their decision. If a person is a market participant, he/she needs to understand risk management, otherwise have someone else do it. Sure things can be manipulated, but only if you subject yourself to it.
    12 Jun, 07:05 PM Reply Like
  • xtddd
    , contributor
    Comments (309) | Send Message
     
    that is right! investors should do own home work! i never follow these big Investment Banks.
    13 Jun, 02:52 AM Reply Like
  • petergrt
    , contributor
    Comments (357) | Send Message
     
    Who listens to those ainalists?

     

    Certainly not institutional investors - they have their own research teams.
    13 Jun, 04:18 PM Reply Like
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