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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