IRON ORE – PRICES

Goldman slashes iron ore forecast 18pc on weak Chinese demand

roymorgansocial Leave a comment

Original article by Joanne Tran
The Australian Financial Review – Page: 27 : 7-Jun-23

Investment bank Goldman Sachs has downgraded its three-month price target for iron ore to $US80 per tonne, and it now expects demand for the steel input to be flat in 2023. Goldman Sachs anticipates that there will be a global surplus of iron ore for the first time since 2018, and this surplus will increase in 2024. The firm also expects the iron ore price to average $US90 per tonne in the first half of 2023, compared with its previous forecast of $US110/tonne.

CORPORATES
THE GOLDMAN SACHS GROUP INCORPORATED

The bears are out again for iron ore

roymorgansocial Leave a comment

Original article by Sean Smith
The West Australian – Page: Online : 21-Apr-23

The iron ore price has averaged $US109 per tonne in Singapore trading so far in the 2022-23 financial year, having peaked at around $US130 a tonne in March. The price of the steel input remains well above the Western Australian government’s revised full-year forecast of $US87.40 per tonne, which was issued in December. However, some analysts are bearish about the outlook for the iron price over the medium-term, citing factors such as rising output from major producers and a slower than expected rebound in demand for steel in China’s construction industry. Iron ore is WA’s biggest export earner.

CORPORATES

Goldman Sachs rules Rio buy

roymorgansocial Leave a comment

Original article by Joanne Tran
The Australian Financial Review – Page: 26 : 7-Mar-23

Investment bank Goldman Sachs is upbeat about the outlook for iron ore, upgrading its price forecast for the steel input in 2023 to $US120 per tonne. Its previous forecast was $US100 a tonne. Goldman Sachs expects an iron ore deficit of 43 million tonnes, due to factors such as rising demand from China as the nation’s economy reopens. The firm has a ‘buy’ recommendation on Rio Tinto’s shares and a ‘sell’ rating on Fortescue Metals Group, while it has a ‘neutral’ position regarding BHP.

CORPORATES
THE GOLDMAN SACHS GROUP INCORPORATED, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, BHP GROUP LIMITED – ASX BHP

Many mining stocks overvalued, warns UBS

roymorgansocial Leave a comment

Original article by Tom Richardson
The Australian Financial Review – Page: 27 : 14-Dec-22

Shares in BHP have gained 36 per cent in US dollar terms since the end of October. However, UBS analyst Lachlan Shaw says the firm believes that the stock has risen too quickly in a short period of time. UBS has a ‘sell’ rating on BHP and rival iron ore producers Rio Tinto and Fortescue Metals Group. The firm also expects the iron ore price to trade at around $US100 a tonne over the first half of 2023, compared with about $US112/tonne at present; it is then forecast to fall to around $US95 a tonne in the December 2023 quarter. UBS is more upbeat about commodities such as gold, coal, zinc and lithium.

CORPORATES
BHP GROUP LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, UBS HOLDINGS PTY LTD

China’s iron ore platform could trigger a shift in pricing power

roymorgansocial Leave a comment

Original article by Alex Gluyas
The Australian Financial Review – Page: 25 : 23-Feb-22

The Chinese government is developing a centralised state-backed platform for the nation’s steel industry to buy iron ore, according to a report from Bloomberg. Tyler Broda of RBC Capital Markets says the implications of such a move could be "wide-ranging and material". Vivek Dhar from the Commonwealth Bank adds that a centralised platform could potentially reduce iron ore prices in the medium to longer term. Chinese steel producers have long argued that large iron ore miners hold too much pricing power.

CORPORATES
BLOOMBERG LP, RBC CAPITAL MARKETS, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Iron ore’s 45pc surge won’t last long: strategists

roymorgansocial Leave a comment

Original article by William McInnes
The Australian Financial Review – Page: 29 : 13-Oct-21

The spot price of iron ore has risen above $US135 per tonne, and Fastmarkets MB notes that the price of the steel input has now gained 45 per cent in the last three weeks. However, Lachlan Shaw of UBS is cautious about the outlook for iron ore, noting that the rebound has been at least partially due to restocking linked to China’s recent week-long National Day holiday. Morgan Stanley is bearish about the near-term outlook for iron ore, forecasting that the price will average $US85 a tonne during the December quarter.

CORPORATES
FASTMARKETS MB, UBS HOLDINGS PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED

Steeled for ore fall budgetary blow

roymorgansocial Leave a comment

Original article by Patrick Commins
The Australian – Page: 2 : 28-Sep-21

Chris Richardson of Deloitte Access Economics says the sharp fall in the iron ore price has major implications for the federal and Western Australian budgets. He says the 2021-22 budget forecasts of both governments may not have been conservative enough in the wake of the price crash. The fall in the iron ore price has been attributed to factors such as the Chinese government’s environmentally-driven restrictions on steel production and the financial problems of property developer Evergrande. Surging commodity prices saw overall tax revenue from the mining sector top $30bn in 2020-21, compared with just $12bn in 2015-16.

CORPORATES
DELOITTE ACCESS ECONOMICS PTY LTD

LNG exports, prices surge to record levels as iron slumps

roymorgansocial Leave a comment

Original article by Perry Williams, David Rogers
The Australian – Page: 13 & 16 : 7-Sep-21

The price of iron ore has fallen by more than 40 per cent since reaching a record high of $US233 per tonne in May. Federal Resources Minister Keith Pitt says strong growth in the price of both LNG and coal is helping to offset the slump in the price of iron ore. The LNG price in Asia has risen to nearly $US20 a gigajoule, while the price of Newcastle coal recently reached a record high of $US173 a tonne. Queensland’s LNG export projects have ramped up shipments in response to the surge in prices.

CORPORATES
AUSTRALIA. DEPT OF INDUSTRY, SCIENCE, ENERGY AND RESOURCES

China price blitz raises iron ore threat

roymorgansocial Leave a comment

Original article by Michael Smith
The Australian Financial Review – Page: 1 & 10 : 25-May-21

The price of iron ore futures fell on 24 May after Chinese authorities announced plans to crack down on commodity price speculation by domestic traders and firms. The crackdown is also seen as an attempt to curb inflation, with China’s producer price index having risen 6.8 per cent year-on-year in April, compared to 4.4 per cent growth recorded in March. Traders expect the clampdown on commodity price speculation will impact on futures trading, but it is not expected to undermine strong demand for iron ore, which is being driven by "tight supply". The share prices of Australian iron ore producers also fell sharply.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, RIO TINTO LIMITED – ASX RIO, BHP GROUP LIMITED – ASX BHP

Bonanza for iron ore miners

roymorgansocial Leave a comment

Original article by Peter Ker
The Australian Financial Review – Page: 1 & 16 : 21-Apr-21

Rio Tinto’s quarterly production report shows that its iron ore exports from the Pilbara totalled 77.79 million tonnes in the first three months of 2021, an increase of seven per cent year-on-year. Peter O’Connor of Shaw & Partners expects Rio Tinto to post an underlying profit of $US17.69bn ($22.7bn) for calendar 2021, eclipsing its record profit of $US15.5bn in 2011. The strength of the iron ore price during the March quarter has boosted the profits of Australia’s five biggest producers of the steel input. The iron ore price recently reached its highest level in more than nine years.

CORPORATES
RIO TINTO LIMITED – ASX RIO, SHAW AND PARTNERS LIMITED