Iron ore prices for March 25, 2020:
News is Wood Mac has turnied bearish following resilient prices
“This is largely due to the resilience of Chinese hot metal production, coinciding with supply-side constraints in Brazil and Australia.
…iron ore’s sell-off over the past few days is the start of a trend, not a blip,” adding that “the balance is tilting towards a bigger hit to iron ore demand than supply.
We are not yet looking at a glut of seaborne iron ore. But risks are escalating, and the balance is tilting towards a bigger hit to iron ore demand than supply.
Targeted financial stimulus aimed at steel intensive infrastructure should cushion the fall, but our pre-crisis forecast for an annual average price of $80/tonne CFR is undoubtedly at risk and subject to revision.
Our analysis shows that prices should gravitate towards $70/tonne during the course of the year.”
With downside risk to $50 which is more realistic to my eyes given I see a very large global recession.