Iron ore prices, down 30 percent this month, are nearing a “floor” as Chinese buyers replenish stocks and shipments from India dwindle, according to UBS AG.
The price may rebound as much as $30 a metric ton to near $150 a ton in coming weeks, UBS analysts led by Sydney-based Tom Price wrote in a report today. The benchmark Asian price has dropped 16 percent this week, heading for its biggest such decline on record, according to prices from The Steel Index Ltd.
“The scale & speed of this week’s correction has little to do with trade fundamentals,” UBS said. “The reported collapse in trade liquidity instead suggests a ‘buyer’s strike’, with consumers deferring purchases until prices stabilize.”
Iron ore for delivery to the port of Tianjin in China, a benchmark for Asia, fell 5.7 percent to $120.20 a metric ton yesterday, according to The Steel Index. That’s the lowest since July 19, 2010.