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Goldman Warns Iron Ore's Jump Into the $70s ‘Is Not Sustainable’

  • Bank flags prospects for rising supply over the coming year
  • Morgan Stanley says ‘we’re iron ore bears’ as drop expected
Production At METALLOINVEST Holding Company OAO Iron Ore And Steel Plants
Photographer: Andrey Rudakov/Bloomberg
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Iron ore’s rally over the past month, with benchmark material pushing back into the $70s, is at risk as banks including Goldman Sachs Group Inc. and Morgan Stanley warn that prices are poised to drop back.

While industry fundamentals have improved, current prices won’t last as more supply is on the way, Goldman analysts including Hui Shan said in a note received on Wednesday. The bank expects a decline to $60 in six months.