Daily iron ore rpice update (Wood Mac bears)

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.

David Llewellyn-Smith
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