The global seaborne iron ore glut will probably be 21 percent bigger than forecast next year as steel production slows in China, the world’s largest consumer, according to Goldman Sachs Group.
Bloomberg News reported the surplus will reach 175 million metric tons in 2015, compared with a prior prediction of 145 million tons, according to a Goldman Sachs report dated yesterday. The bank estimates that output will exceed demand by 72 million tons and prices will average $109 a ton in 2014, before dropping to $80 next year.
Iron ore has slumped 27 percent this year as economic growth in China slowed and mining companies from BHP Billiton Ltd. to Rio Tinto Group in Australia boosted output, shifting the global seaborne market into a glut.
On Tuesday, May 20, the day’s biggest mover was the US HRC futures contract 3-month price, which saw a 1.6 percent decline to $628.00 per short ton. The US HRC futures contract spot price rose by 0.6 percent to $685.00 on Tuesday after remaining flat for two days.
Chinese steel prices closed flat for the day. The price of iron ore 58% fines from India hit a high price of CNY 840.00 ($134.69) and a low price of CNY 830.00 ($133.09) per dry metric ton. The price of Chinese HRC continues hovering around CNY 3,360 ($538.76) per metric ton for the fifth day in a row. For the fifth day in a row, the price of Chinese coking coal remained essentially flat at CNY 1,390 ($222.88) per metric ton.
The steel billet cash price held steady on the LME at $390.00 per metric ton. The steel billet 3-month price saw little movement on the LME at $400.00 per metric ton.