Citigroup Raises Iron Ore Outlook as Demand ‘May Surprise’
- Government stimulus may boost demand in top user, Citi says
- Bank raises price forecast for final three months by 21%
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China’s efforts to prop up its economy and escalating mining costs may delay iron ore’s inevitable decline back below $40, according to Citigroup Inc., which raised its price forecasts by as much as 21 percent.
The bank predicts that the raw material used to make steel will trade at $48 a metric ton in the third quarter and $46 in the final three months, compared with previous estimates of $46 and $38, Citigroup said in a report Tuesday. It will average $49 this year and $42 the year after, before sinking to $38 in 2018 and 2019, it said.