Citi: the price of iron ore falls below $ 70 per ton in the near future
Global iron ore prices in the next three months will fall by 22%, analysts predict Citi Bank. Iron ore may fall to $ 70 per tonne against the backdrop of falling manufacturing activity in the automotive and engineering sector.
According to analysts, demand for steel in China, the largest consumer and producer of metals in the world, in 2020 will fall by 1.5%.
"the weakening of the automotive industry and the machinery sector in China due to the expected slow recovery of car sales after they fall against the pandemic COVID-19 and concerns of consumers related to job loss and lower wages," the review says.
At the same time, the demand for steel from the construction sector is rapidly recovering after the country's quarantine.
the Excess steel on the market dragging down not only metal prices but also the price of iron ore. In addition, restoration of small electric plants running on scrap, which was stopped for a period of quarantine will displace 27 million tons of iron ore in the coming months.
In 2020, according to estimates by Citi, China will reduce imports of iron ore to 4 million tons, while previously expected growth to 12 million tons compared to the year 2019.