Iron ore price negotiations - JP Morgan reduce forecast - 21 Nov, 2008
Bloomberg reported that JP Morgan Chase forecast for contract iron ore prices may decline 30% in 2009 after a record of 6 years gains amid falling steel production and a slump in cash prices.
Analysts at JP Morgan Chase & Company said that prices for benchmark Australian ore for the year starting April 1st 2009 may drop to 101.27 US cents per tonne unit. The bank previously forecast a 10% decline from 2008 contract price of 144.66 cents.
Mr Rodolfo De Angele, who led the analysts said that “Global steel demand has dropped abruptly in the last two months driving a deluge of production cuts. This, coupled with high inventories in China and falling freight rates, has led spot prices to drop 14% to 24% below contract prices, which we believe should set the tone for lower prices in 2009.”
It may be mentioned that Goldman Sachs JBWere Pty, Macquarie Group, RBC Capital Markets and Australia & New Zealand Banking Group have all cut iron ore price forecasts.
