Westpac has predicted iron ore’s return to gloomier days, falling below US$40 per tonne next year.
It expects the metal to reach a new low, slipping to US$47 per tonne in the last quarter of 2016, then plummeting between US$38 and US$37 per tonne in the first quarter of next year, according to Bloomberg.
These predictions follow Citibank’s own negative forecasts for the metal – albeit not as dire as Westpac’s – with the group expecting an average of US$51 per tonne in the fourth quarter of 2016, before it slides down to US$45 per tonne early next year.
It stated there was still a significant oversupply, a situation exacerbated by Roy Hill coming online and the ramping up of Vale’s S11D operations in Brazil, as well as a stronger price enticing previously uneconomical mines to reopen.
