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Iron ore will be significantly cheaper in 2022 - consensus forecast by leading banks

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The fall in iron ore prices can only stop if the largest Australian companies begin to restrict supplies, saving the market from oversupply, analysts at Morgan Stanley believe.

Iron ore will be significantly cheaper in 2022 - consensus forecast by leading banks

Almost all banks and brokers participating in the Refinitiv consensus forecasts lowered their expectations for prices for iron ore raw materials for 2022 in November-December amid a decrease in demand for raw materials from China.

According to reports from a number of banks (Barclays, Bofa, Commerzbank, HSBC, Jefferies, Morgan Stanley, RBC, UBS) published this quarter, next year the average cost of iron ore with 62% iron content will be less than $ 100 per ton on CFR China.

At the same time, the majority of banking analysts revised their forecast prices for 2022 down by $ 20 or more.

“We will see an oversupply in the iron ore market as China peaks in steel production. We expect iron ore demand in China to fall by 18% (about 240 million tonnes) by 2030 compared to 2021 levels, as in the long term, the country's steel production will decline at a CAGR of 1%, ”the report said. Morgan Stanley.

Analysts at Alfa-Bank, BMO, Credit Suisse, Deutsche Bank, JPMorgan, Scotiabank and VTB have also significantly revised their forecasts for prices for 2022, but they believe that prices will not fall below $ 100 per ton and will be at 102- $ 113 per tonne CFR China.

Refinitiv regularly collects and publishes price forecasts for iron ore, steel scrap, steel, coal, ferroalloys and fertilizers from leading banks and brokers. The latest forecasts are already available in the Eikon terminal on the Forecasts tab of the CIS Metals and Mining (CCIM) page.

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