Australia revise iron ore price forecast 20% lower

Australia revise iron ore price forecast 20% lower

The Australian Department of Industry has lowered its iron ore price forecast for 2017 by 20% according to its latest quarterly report.

Having predicted average prices for 2017 at US$56 per tonne rising to $60+ in 2018, Australia’s Department of Industry, Innovation & Science now says prices will continue to decline to average $44.80 in 2017.

The prediction comes despite the Northern China benchmark continuing to trade above the $50 a tonne mark. On Friday, the import price for 62% Fe content ore at the port of Tianjin hit $55.20.

The volatile commodity has seen a sharp decrease since trading near $70 a tonne in April, however the year to date price is up 28.7% averaging $51.70.

The government department said in the report the price forecast is “based on the assessment that loss making operations may continue to produce for longer than previously expected. It also factors in increased supply from India and additional cost reductions reported by iron ore producers.”