From UBS via The Australian:
UBS has lowered its spot iron ore price forecasts.
It now expects $US59 a tonne for 2015 and $US58 a tonne for 2016, down from previous forecasts of $US66 and $US65 a tonne respectively.
“This is our new assessment of where prices need to be sustained for 2-years to drive-out supply,” the broker says.
The reassessment follows a downward revision to its 2015 China steel output forecasts, due to heightened signs of slowing domestic property in China, weak export demand depressing China’s domestic steel market, and stronger enforcement of environmental policy reducing China’s steel capacity and capacity utilization.
UBS now forecasts $835/837/841 million tonnes of steel production in China for 2015-16-17 versus previous forecasts of $US830/837/845 million tonnes.
Too high for steel. too high for iron ore.
