Morgan Stanley forecast global iron ore prices would slightly retreat in the fourth quarter this year, with easing demand from China during the cold season.
China's crude steel production is set to decline as the construction slows down approaching the winter season, and demand for iron ore is also likely to turn weaker, which may lead to iron ore prices fallback, according to Morgan Stanley.
Supported by the recovery of construction and the strong growth of factory production in China, the 62% Fe iron ore reached more than $130/t CIF North China in mid-September, a record high since mid-January 2014. This was a 41% surge from the start of the year.
However, prices of the iron ore grade have fallen to around $119/t presently. Morgan Stanley predicted that iron ore prices may drop to around $100/t in the fourth quarter and further fall to around $81/t in 2021.
Outbound shipments from major iron ore exporting countries have shown a downward trend, according to Morgan Stanley.
The total volume of iron ore sent to destinations from the 19 ports and 16 mining companies in Australia and Brazil declined during the week starting September 14, falling over 8% week on week, data showed.
(Writing by Emma Yang Editing by Harry Huo)
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