Goldman Sachs Cuts Iron Ore Price Forecast
Goldman Sachs on Monday cut its iron-ore price forecast for Q4 2024 by $15 to $85 per metric ton, citing an ongoing supply glut despite steady demand from China, the world’s largest consumer.
Short-Term Optimism vs. Long-Term Pressure
Dalian iron-ore futures surged last week, driven by hopes for Chinese stimulus measures and recovering steel demand, though China’s economic recovery remains slow.
In a note, Goldman analysts cautioned that iron-ore prices could drop further in October due to rising inventory levels, despite short-term support from pre-Golden Week restocking.
Iron Ore’s Importance to China’s Industrial Sector
“Iron ore drives China’s industrial sector, particularly steel production,” the bank noted, while adding that falling exports may weaken demand, leaving prices vulnerable.
Global Oversupply and Weak Demand
The report highlighted that despite a reduction in Indian exports—India being the fourth-largest iron ore producer—global oversupply remains due to weak demand. This imbalance, Goldman said, requires lower-cost producers to cut production to stabilize the market.
Goldman Sachs concluded that further price declines may be necessary to prompt the needed supply cuts.
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