True from Macqaurie:
The annual SGX Iron ore week in Singapore was very well attended as usual last week, and the outlook between market participants was generally more optimistic near term than we had expected. However the general view for the second half of the year was largely in line with our more bearish stance, as when asked their price expectation for this year in a poll, 31% of attendees expected prices to average between $60-70/t, with 24% at $50-60/t and 21% at $40- 50/t.
As we have written previously, we do not feel there are any significant structural changes in the iron ore and steel market in China which will support higher prices medium term. Instead we believe we are just going through classic pricing cycles in steel and iron ore, where supply has responded to high prices and margin incentives and ultimately overwhelmed demand, while restocking has come to an end.
