Iron-ore seen around USD80/t in Q2 2017 - ANZ

Analysts at ANZ released their latest outlook on iron-ore prices today, noting an upgrade in the price-forecasts for 2017.

Key Quotes:

“In the short term, we don't expect the recent weakness in iron ore prices to develop into a full blown sell-off.”

“A combination of further supply-side reforms in China and relatively stable domestic demand especially from the infrastructure sectors should continue to support steel demand.”

“As a result, we have upgraded our average annual iron ore price forecasts by 17% to USD79/t in 2017. In particular, we expect prices to hold around USD80/t in Q2 2017.”

“Fresh curbs on Chinese property purchases represent the main risk to prices. China has rolled out a fresh round of property purchase restrictions recently across more than 20 cities and/or counties.”

“However, our China economists believe these measures will only temporarily cool a red hot property market. In fact, pent-up demand could be unleashed once existing policies are loosened.”

“Some of the weakness in iron ore prices has also been attributed to concerns over inventories of steel and iron ore. However, we believe these concerns are overdone. “