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This ‘Hot Commodity’ Is Destined to Cool Off Soon: Citigroup

  • Iron ore seen averaging $45 a metric ton next year, bank says
  • Rising supply from projects, weaker demand may hurt prices
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Why Iron Ore Prices May Be Headed Lower

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Iron ore, dubbed by Citigroup Inc. as one of the hot commodities of 2016, looks set to cool off. Prices may soon sag as supply rises and steel demand fades, the bank said, adding to a chorus of forecasters who are calling time on an unexpected rally.

The raw material will average $51 a metric ton in the final quarter and $45 in 2017 under the base-case scenario, analysts led by Ed Morse said in a report received Tuesday. That compares with Metal Bulletin Ltd.’s 62 percent content price of $61.75 a dry ton on Tuesday, and a year-to-date average of $53.64.