Goldman Sachs and Citibank Cuts Iron Ore Price Forecast, with the Former Citing Surplus Steel in China and Slower Recovery of Property Sales

Although Singapore's iron ore swap has reached the $110/mt mark, Citibank expects iron ore to resume its decline and advises traders to sell during the rebound. Citibank cut its price forecasts for the second quarter by 4.3% to $110/mt, by 4.8% to $100/mt in the third quarter and by 14.3% to $90 a tonne in the fourth quarter.

Goldman Sachs also cut iron ore price forecast to $90/mt from $110/mt. Goldman Sachs pointed out that with the production target may be lowered, the risk of excess steel supply in China is becoming more and more obvious and said a slower recovery in property sales will lead to a 5% drop in steel demand.

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