Goldman Cuts Iron Ore Price Forecast

The iron ore market can’t catch a break. The slowdown in China has already hammered prices by close to 50 percent this year and now Goldman Sachs has slashed its price forecast for the raw material used in steel-making.

Seen as a key gauge of the global economy, iron ore prices tanked to $37 a ton last Friday, the lowest since at least 2008 due to a slowdown in construction activity in largest consumer China.

The break below $40 also came a year ahead of Goldman Sachs’ schedule, the investment bank said in a report on Wednesday.

There is likely to be more downside, the house added, cutting its price forecast for iron ore to $38 in 2016 – down 13 percent from its previous call of $44.

Goldman tips iron prices to fall to $35 a ton in 2017 and 2018, down 14 percent from its previous prediction of $40.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza