Fitch Solutions reports that the iron-ore price increase from the second to the fourth quarter of 2020 has continued.
It states that during the first half of this year, prices could shrink as production rises and demand growth slows.
On the supply side, boosting Brazil’s demand growth would help to loosen the seaborne market’s tight supply, says Fitch Solutions.
In terms of demand, China’s strong demand for iron ore began in the second quarter of last year, which will probably slow during this first quarter of the year as production cuts in winter steel become effective and well-worked inventory inventories encourage buyers to stop buying at current high prices.
Fitch Solutions predicts that this year’s average iron-ore price will be $120/t and 2022 $100/t.
Fitch Solutions expect iron-ore prices to follow a downward path for several years after this year.
It is expected that by 2025, prices will decrease to about $72/t.
Fitch Solutions states that a combination of shrinking demand growth and a strengthening market supply would accelerate this price downturn.
