Demand is sluggish, and iron ore has fallen to $93, hitting a new nine-month low, with Citigroup and Goldman Sachs both lowering their target prices
Citigroup has significantly lowered its three-month iron ore price forecast from USD 100 per ton to USD 90 per ton, while the six to twelve-month target price has been further cut from USD 90 to USD 85 per ton. Goldman Sachs analysts have also further reduced their iron ore price targets and noted that miners and spot traders are aggressively selling off
Affected by weak demand expectations, iron ore prices have recently "fallen continuously," reaching a nine-month low. Wall Street investment banks Citigroup and Goldman Sachs have both lowered their target prices.
Iron ore prices in the Singapore market have declined for the fourth consecutive trading day, breaking below the key support level of USD 93/ton, with a minimum of USD 92.90/ton, marking the lowest level in nine months.
Latest trade data shows that China's national steel production in May decreased compared to the daily average output in April, falling approximately 7% year-on-year, marking the weakest performance for May since 2018.
This data directly impacts iron ore demand expectations. As the world's largest iron ore consumer, China accounts for over 70% of global trade volume.
When steel production experiences such a significant decline, the continuous drop in iron ore prices is not surprising. Iron ore is a crucial raw material for steel production companies.
In the face of a continuously deteriorating market environment, both Citigroup and Goldman Sachs have lowered their target prices for iron ore. Citigroup analysts stated in their research report:
"Due to the upcoming seasonal off-peak period, China's steel demand may remain weak in the coming months."
The adjustment in Citigroup's forecast is shocking: the three-month price forecast has been drastically lowered from USD 100/ton to USD 90/ton, while the six to twelve-month target price has been further cut from USD 90 to USD 85/ton.
Goldman Sachs analyst James McGeoch has also further lowered the iron ore price target. McGeoch observed that miners and spot traders are aggressively selling off.
He stated, at the beginning of the year, the market was optimistic about a range of USD 100-110, which then changed to USD 95-105, then to USD 90-100, and now has narrowed to a range of USD 90-95.
