- Iron ore prices may tumble back to $40/metric ton during H2 as the approach of winter in China typically slows steel demand and output, Morgan Stanley analysts predict.
- Iron ore has soared this year, snapping three years of declines, as stimulus and a credit-fueled property boom in China lifted demand, but Stanley notes that iron ore prices have on average dropped in September, October and November over the past 10 years, and it also expects ore prices to become increasingly capped during H2 by ongoing supply growth.
- The firm maintains its forecasts for iron ore to average $45/ton this quarter and $35 in Q4, with a base-case H2 estimate of $40.
- Relevant tickers include VALE, BHP, RIO, CLF