Citigroup Says Iron Ore Rally to Fade as Oversupply Kicks In
- Seaborne glut expected to double to 38 million tons next year
- Prices may decline in the second half as steel retreats
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The global iron ore market faces increasingly severe oversupply, according to Citigroup Inc., which said the commodity’s gains will probably be reversed in the second half.
Gains in production, including from miners that restarted output after this year’s rally, coupled with likely losses in steel prices, will combine to hurt iron ore, the bank said in a quarterly commodities report received Monday. While iron ore’s price declines may have been delayed, they’re still coming, analysts led by Ed Morse wrote.