Iron-ore rally likely to fizzle - HSBC
|In the view of the HSBC’s Metals and Mining Equities team, the recent upsurge in iron-ore prices is unsustainable and likely to fizzle out in the coming months.
Key Quotes (via Business Insider):
“We think spot prices in the high $80 a tonne region look unsustainable.
In the short term, we expect prices to pull back towards $75 a tonne where there is seasonal support. The main risk to this view is that uncertainty regarding further disruptions at Vale from potential government intervention may keep prices elevated
However, we believe further price pressure from slowing steel production, contracting steel margins and recovering supply is likely to see prices trend towards our $67 a tonne average price forecast for 2019 as supportive factors wane.
In our view, the pellet market faces a more meaningful disruption, with 11 million tonnes of production, or 9% of the seaborne market, suspended.
Premiums have risen around $10 a tonne in response,and with no immediate replacement on the horizon, we see this as more sustainable than benchmark iron ore prices.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.