Goldman Sachs on Monday slashed its iron-ore price forecast for the fourth quarter of 2024 by $15 to $85 per metric ton, citing a supply glut despite stabilizing demand from China, the top global consumer.
Dalian iron-ore futures gained last week as optimism around Chinese stimulus measures and recovering steel demand buoyed market sentiment, even as the country faces a slow economic rebound.
Goldman analysts, in a note, warned of further price drops in October due to a continued build-up in iron ore stocks, despite short-term support from pre-Golden Week restocking.
"Iron ore fuels China’s industrial sector, especially steel production," the bank said, adding that while Chinese exports may decline, domestic demand is unlikely to provide sufficient support, leaving prices vulnerable.
The report noted that, despite reduced exports from India, the world’s fourth-largest iron ore producer, global oversupply persists due to sluggish demand, requiring further production cuts from lower-cost producers to balance the market.
Goldman concluded that iron-ore prices may need to drop further to trigger the necessary supply cuts.
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